I recently took my own advice and froze my credit with all three major credit bureaus. It caused a slight inconvenience when I switched telecom providers, but a credit freeze can save you massive hassles in the future for a minimal time investment.
In response to the massive Capital One data breach that came to light July 29, I took my own advice and froze my credit with all three major credit bureaus.
It took just a few minutes to freeze my credit online with Experian, Equifax and TransUnion – less than 10 minutes, combined. You can also freeze your credit by phone and even by snail mail if you prefer. At last check, fewer than 1 in 4 U.S. adults had frozen their credit. I’d like to see that figure go a lot higher.
The minimal time investment could save you massive hassles in the future. More than 14 million Americans fell victim to identity fraud in 2018, per Javelin Strategy & Research. The average identity theft victim spends 30 hours resolving the situation, according to the Federal Trade Commission. It takes twice as long to resolve “new accounts” fraud, which is exactly what a credit freeze protects against.
Credit freezes became free nationwide late last year. When you freeze your credit, it means potential lenders cannot see your credit report. And if they can’t see it, they won’t issue new credit.
That’s really important because it can be difficult to unwind a fraudulent loan that a criminal opened in your name. New account fraud totaled $3.4 billion in 2018 and is on the rise, Javelin states.
How a credit freeze works
A credit freeze doesn’t affect your existing credit cards or other loans and lines of credit. I’m not too concerned about fraudulent transactions on credit cards you already have. This has already happened to many of us, and it’s easy to get those charges wiped off at no cost.
This is a good reminder of why you should review your transaction log at least once a month. It’s also a useful tip to pay with credit, not debit. While debit cards also have zero liability policies and you should eventually get the money back, it’s likely going to be missing from your checking account for at least a week or two, and you might need it before then.
A credit card is merely a line of credit – not direct access to your checking account.
A credit freeze is so good at preventing new account openings that it will even lock you out. When you want to apply for credit, you need to lift the freeze by contacting the credit bureaus. If you do it online or over the phone, the bureaus are required to lift the freeze within one hour. By mail, it could take up to three business days after they receive your requests.
Lifting the freeze
I got a taste of the unfreezing process sooner than I anticipated. A couple of weeks after I froze my credit, my wife and I decided to switch TV/internet/phone providers.
My online application hit a snag and I was instructed to call the new provider, Verizon. They told me the delay was because they needed to review my credit, or else I would have to pay a $250 deposit, and they couldn’t see my credit file because it was frozen.
I learned Verizon only needed to check my Experian report, so I logged onto Experian’s website and lifted my credit freeze within a couple of minutes. It was quick and easy (particularly since I remembered my PIN – be sure to do the same if you elect to freeze your credit).
Experian asked me if I wanted to lift the freeze permanently or until a specific date. I picked a day later that week and went back to finish my new service order.
It was a smooth process with Experian, but it did complicate the Verizon sign-up. While Verizon was able to view my Experian file within five minutes, its ordering system jammed up for some reason, and I had to submit the order again. This whole exercise cost me an hour on the phone with customer service.
I think this was more of a Verizon issue than a credit freeze issue, but still, it was a negative experience. I could potentially have avoided it if I had realized a credit check would be necessary and lifted the credit freeze before applying for the new telecom services.