Freezing Your Credit

What is a Credit Freeze?

A credit freeze is a poorly-named security feature offered by consumer credit reporting agencies that prevents anyone except you from opening new accounts in your name. Credit freezes are poorly named for two reasons:

1. They do not stop your credit score from changing. Your score will still improve as you do positive things and fall as you do negative things.
2. You will still be able to open new accounts. Credit freezes will only stop unauthorized people from opening new accounts without your knowledge or consent.

Why do I Need a Credit Freeze?

Credit freezes are free for all American citizens by federal law. A credit freeze will stop a criminal who steals your identifying information from being able to open new accounts in your name, such as store credit cards and loans.

Identity theft isn’t always about draining your existing bank account, it’s often about opening new accounts to spend money that the criminal never intends to pay back but the bank expects you to be responsible for. Identity theft is an extremely long, complicated, frustrating, and exhausting experience that can take months or even years to fix - if it ever gets fixed at all.

According to the Bureau of Justice, over 2/3 of identity theft victims lost more than $10,000 and had to spend hundreds of hours proving to the bank and police that the accounts were fraudulent.

In 2017, consumer credit scoring agency Equifax suffered a data breach that affected nearly half of all Americans. This is just one of countless breaches that occur each day, many including sensitive personally identifiable information.

Additionally, many of us have shared personal information like birthdays and past addresses in ways that have ultimately found their way onto people search websites like Spokeo and Axciom.

In other words: if you have an internet connection, it’s highly likely that a criminal already has all the information about you they need to open a fraudulent account in your name. This is why every American reading this needs to freeze their credit.

How do I Freeze my Credit?

Freezing your credit must be done individually with each credit union: Equifax, Experian, TransUnion.

You will be required to create an account from which you will be able to unfreeze your credit as needed (remember to use a password manager to store this and any other relevant information). Credit can be unfrozen temporarily. You can unfreeze your credit at one agency or all three, but just like freezing credit you must do each agency individually.

Fraud Alerts

Unfortunately, some people have discovered that a freeze can be circumvented thanks to publicly-available information on people search websites, so make sure to also place a fraud alert. A fraud alert is like two-factor authentication for your credit; the agency being queried will call you and ask a few questions to verify that it is you authorizing the account (so be sure to provide a valid phone number during signup). While freezes last indefinitely, fraud alerts need to be placed once every year. I recommend setting a reminder so you don’t forget to renew it each year. Fortunately fraud alerts only need to be placed with one agency and the alert will be passed around to the others.

Child Identity Theft

If you have children - especially if they are minors - be sure to freeze their credit as well. Identity theft of minors is a lucrative and growing area of cybercrime because most children do not have any negative marks on their credit reports and it can potentially take years for anyone to notice the crime has even occurred.

Credit Monitoring

Once you have frozen your credit, be sure to request and examine a credit report from each agency regularly to check for any errors. In the US you can do this for free once per week at Annual Credit Report.com (this will give you the full report, but not the score; no account is required). In the past credit reporting agencies only offered free reports once a year, so the conventional wisdom was to request each report once per year, staggering them every four months. I recommend checking your reports at least this often.

I have found that due to my increased privacy lifestyle, I am sometimes forced to submit additional verification paperwork via “snail mail.” Sometimes simply turning off my VPN will be enough to let me do the entire process digitally.