Pros and Cons of Freezing Your Credit
You might be prompted to freeze your credit card to protect yourself from fraudsters or identity thieves. With creditors storing their information in the cloud, the likelihood of identity thieves and fraudsters accessing and using your information is high. Freezing your credit prevents credit reporting agencies from revealing the contents of your credit report to anybody asking for such. Consequently, you won’t have to worry about new credit accounts being established behind your back and in your name.
How to Freeze Your Credit
If you are looking to freeze your credit, you can contact the credit bureaus to settle on the best way for you to do so. Luckily, you can go through with the process by phone or online in the comfort of your house. You can engage the following credit bureaus online or through the following contacts:
- Equifax: 1-800-349-9660 or com
- TransUnion: 1-800-680-7289 or com
- Experian: 1-888-397-3742 or com
The process involves verification of identity, after which the relevant credit bureau gives you a PIN. The PIN is important since it will be needed should you decide to unfreeze or thaw your credit report. After freezing, it is imperative to request a report, preferably after six months, to ensure that things are as you left them after freezing.
How Long Does it Take to Unfreeze Your Credit
If you request a credit thaw online or through the phone, it takes a maximum of one hour to open. However, according to the Federal Trade Commission, the credit bureau has up to three days to unfreeze your credit if you make a request through an email.
Credit Freeze Pros
Freezing your credit comes along with the following benefits:
- It blocks the unwarranted opening of new lines of credit
If fraudsters or identity thieves attempt to open new lines of credit or any other account that demand a credit check in your name, they are blocked instantly. Before establishing new credit lines, lenders will always check your credit file to ensure you are in a position to repay the credit loan. A freeze limits access to your credit files hence preventing unauthorized credit lines without your knowledge.
- It offers protection against Identity Fraud.
If you freeze your credit, you limit access to critical personal information that fraudsters use to con. They will not only be locked out from establishing new credit lines but also other financial accounts that require your personal information. However, it is important to seek other means of self-protection if you have other accounts that use personal information. With technological advancements, fraudsters have devised new means to steal personal information.
- It does not affect your credit score
If you freeze your credit, your credit score will not change due to such. However, this does not mean your credit score will remain the same; many other constants can prompt such a change. The amount of debts you currently have or how prompt you are with your debt payments are among the reasons that can change your credit score.
- It costs nothing
You do not have to pay a dime to freeze or unfreeze your account. The only cost thins down to time and conveniently, not much time is needed to pull through.
Credit Freeze Cons
Freezing your credit, however, comes with some downsides. Such could include the following:
- It takes time and effort
To successfully freeze your credit, time, and some efforts are required, you have to reach out to the relevant credit bureaus.
- You have to keep track of your PINs.
It is easy to lose or misplace the issued personal identification numbers required to freeze your credit. Moreover, if you need to unfreeze or thaw your credit, you have to remember your PIN. If you lose it, you have to incur extra steps to unfreeze successfully.
- It does not protect your existing accounts.
While a credit freeze may prevent identity fraudsters from opening new credit lines in your name, it cannot protect existing accounts. They can still devise means to access and perform unwarranted actions on the existing accounts if you do not seek relevant ways to keep them off.
- To open other lines of credit, you have to unfreeze
If the need arises to open other lines of credit, you will be forced to thaw your credit. Creditors cannot access your credit file unless you unfreeze your frozen credit.
- It takes Long to Unfreeze
It takes a longer time to thaw your credit than to freeze it. This could be inconvenient if you need to credit urgently.
What can prompt you To Thaw your Credit?
Sometimes you might be forced to unfreeze your credit to fulfill some critical obligations. Among the situations that may force you to thaw your credit include:
- Huge buying engagements; if you are looking to buy a car, house, rent an apartment, or sign up for a cell phone payment plan, you could be prompted to unfreeze your credit, especially if you intend to cover the credit costs.
- If you want to create an account with a utility entity
- Application for a credit card; you cannot open a credit card if your credit is already frozen.
- If you are signing up for a new job, most employers demand credit checks for prospective employees.
- Some companies need to access your credit files; if you are in business with some entities, they might need credit files hence forcing you to unfreeze your credit.
It is also imperative to have in mind that a credit freeze does not apply to current creditors. Such may still access your credit files. Moreover, government agencies may also access such under certain circumstances. Court administrative orders, search warrants, or a subpoena may give such agencies access to your credit files.
A credit freeze might prevent unwarranted access to your credit files and, to some extent, protect you against identity fraudsters. However, this cannot be your ultimate security from fraudsters. There is a need to have other security measurements in place to secure even your already existing accounts. It is also important to keep tabs on your credit reports. This way, it is easy to monitor any suspicious activities or anomalies.