4 Interesting Benefits of Credit Freeze
Credit Freeze secures your credit scores from identity theft. Data digitalization has a few drawbacks as well. Ever thought of getting stuck in identity theft? What if people use your identity to secure loans and enjoy the benefits? Here is a solution that can help you ensure the safety of your credit information.
If you’ve never heard of a credit freeze, or if you don’t know the benefits of a credit freeze, then you’re in luck. We’re about to introduce to you possibly one of the most effective protection solutions for identity theft…
What Is a Credit Freeze?
Simply put, a credit freeze is a way for credit holders to control how their credit reports are used by credit bureaus. When you put a freeze on your credit report, you are telling credit bureaus not to give it out to anyone who may ask for it.
This prevents lenders from making inquiries on your credit report. And, as a result, lenders will not be able to issue loans in your name. Credit cards also cannot be opened in your name. (Exception: loans that do not require a credit check. They are usually not substantial and can usually be removed from a credit report through dispute.)
How Does It Work?
It’s mandated by law, it’s offered by all three credit bureaus, and it puts a hard stop to any lender inquiries for your credit report. The credit freeze (also known as a security freeze, credit report freeze, or credit lockdown) is often the last resort for identity protection. However, that’s not always the case, as the risks are minimal and the result is keeping you protected from fraud
What Are The Benefits Of A Credit Freeze?
Many people are still unaware of the credit freeze concept. This option of securing your credit has numerous benefits. Here are some of them.
Fraudsters may create a fake account similar to yours to borrow loans. Many fraudsters will open new loans in someone’s name, run up the balance, and take all the benefits without dealing with any of the consequences. Freezing your credit is an effective way to prevent this, especially if you feel you’re a target. When they apply for loans in your name, they will not get credit reports as you froze your account in the first place. This will not them have a credit report and eventually, they cannot borrow loans in your name.
If you find any suspicious activity from your account. You can freeze your credit, so that nobody can access your account. This credit freeze process will let you stay relaxed and not worry about fraudsters. It is better to freeze your credit if you have any doubts or just for your assurance.
Freeze Your People’s Account
You can also freeze your spouse, children, or parent’s credits if you have the power of attorney. There are enough possibilities of identity theft in people’s credit who are not aware of these identity theft possibilities. You can freeze their account on their behalf if they do not know how to do it or if they are careless about that.
Stops You From Impulsive Decisions
Some people might take loans impulsively without thinking about their capability to repay the loans. Just because they have good credit scores, they may apply for loans for not-so-important things. In this case, a credit freeze may help you as a remainder to reconsider your decisions.
All in all, these benefits of a credit freeze are substantial and can make a significant difference in protection from common threats.
What Are The Cons Of A Credit Freeze?
- Your credit report can’t be accessed by lenders, making it impossible for you to open loans in your own name. If you want to open new loans, you will have to lift the freeze. This also means other people who may want to see your credit reports, such as potential landlords or employers, will not be able to see them either.
- Freezing your credit report costs a small amount of money, usually $10. Not only that, unfreezing your credit report also costs $10. These fees usually get waived for victims of identity theft, though. NOTE: Equifax is currently offering credit freezes for free, as of January 2019.
- A frozen credit report will require a PIN, which isn’t the most secure feature. If you lose the PIN, unfreezing your report will be much more difficult.
How to Freeze Your Credit for Free
If you want to place a free credit freeze on the three credit bureaus (Experian, Equifax, and TransUnion), the process can vary from agency to agency.
If you want to lift your credit, you can do by visiting your online account with each of the credit bureaus.
Does Credit Freeze Affect your Credit Score?
A credit freeze will neither have an impact on your credit score nor will impact your credit accounts.
A credit freeze will impact your ability to qualify for a loan or credit card. If you are lifting the freeze temporarily it is better to know if you have enough time to complete the loan application and its following processes.
It’s important to keep track of your credit score and check your credit reports regularly.
Why Would I Need a Credit Freeze?
If you fall under these categories, you may consider a credit freeze.
- If you are the victim of identity theft, or you feel you are a target for identity theft,
- If you are at risk due to a recent data breach,
- If you are/or have zero plans to open new loans, move house, open a new business, or change jobs in the new future (1+ year)
If you are in one of these categories then a credit freeze is an excellent option for you, and the benefits of a credit freeze outweigh the cons. Just don’t lose your PIN or forget about the freeze!
I Need a Credit Freeze: How Do I Do It?
Go to these pages:
- Equifax: https://www.equifax.com/personal/credit-report-services/
- Experian: https://www.experian.com/ncaconline/freeze
- TransUnion: https://www.transunion.com/credit-freeze
Follow the steps for each bureau, completing each form. It’s really quite simple.
Your credit will be frozen soon, preventing you or anyone else from taking out loans in your name.
To fully freeze your credit report, you will need to contact all three credit bureaus and have each of them freeze your credit report. This is because all credit bureaus give different credit reports.
Want real-time monitoring of your credit, by people you can trust? Contact The Credit Pros for a free consultation!
Frequently Asked Question
1. What is a credit freeze?
The credit freeze is a security shield on your credit report. This says the bureaus not to provide your credit information to lenders who request. This credit freeze will protect you from identity thefts and other security issues.
2. Will credit freeze assure 100% safety?
Some loans may not require your credit information to get approved. In those cases, freezing your credit report is not going to stop lenders from providing loans.
3. Is it possible to unfreeze my credit report?
You can unfreeze your credit anytime you want. You can also decide whether to remove the freeze temporarily or permanently.