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Credit Freezes and Fraud Alerts

IF YOU FEAR YOUR IDENTITY has been stolen or you’re very concerned about the risk, one option is to freeze your credit. Once your credit is frozen, the credit bureaus can’t release information from your credit reports without your permission, effectively stopping someone from borrowing money using your identify.

To freeze your credit—also known as a security freeze—you have to contact the three major credit bureaus. You can get details at each of their websites, Equifax.com, Experian.com and TransUnion.com. As an added precaution, you might also freeze your credit at the National Consumer Telecom & Utilities Exchange, which serves cellphone, pay TV and utility companies.

Freezing and unfreezing your credit became free for everybody as of  Sept. 2018. You can also freeze the credit for your children who are under age 16. Keep in mind that you’ll need to unfreeze your credit if, say, you apply for a mortgage or a new credit card. Moreover, it isn’t just lenders who look at your credit reports. A credit freeze could also interfere with a job application or renting an apartment.

Freezing your credit is an easier choice for those who are, say, over age 50 and no longer applying for new loans and credit cards. What if you’re younger and still regularly applying for credit, so a credit freeze would be a hassle? As an alternative, you might place a fraud alert on your credit files, which will then require lenders to take extra steps to confirm your identity before they open an account in your name. There’s no cost involved. If you place an initial fraud alert at one of the three major credit bureaus, it’s required to inform the other two. An initial fraud alert lasts one year—and it can be renewed thereafter.

What if you’re a victim of identity theft? In those situations, you can place an extended fraud alert, which can last up to seven years. You’ll need to submit proof of identity theft, such as a police report, and—unlike an initial fraud alert—you need to send the request to all three credit bureaus.

Next: Debt Ratios

Previous: Protecting Yourself

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