Freeze Your Credit To Protect Your Identity

Two years ago, my online identity was compromised; I have an eBay account, and someone hacked into it and bought $1,000 worth of electronics.  Luckily I caught the theft the very next day, and eBay was wonderful and took care of the charges.  However, that spooked me and my husband, so we decided to take the radical step of freezing our credit to protect our identity, in part because we plan to buy a home in the next few years and do not want anything to compromise our credit score.

Benefits of Freezing Your Credit

When you use a security freeze, you essentially lock down your credit.  If your information is stolen and thieves try to open up an account, they will be thwarted.  Ultimately, this is the best way to protect your identity.  Credit monitoring may help you recognize theft has occurred, but a freeze keeps the theft from ever occurring.

Drawbacks of Freezing Your Credit

You must plan ahead. When my husband and I start to look for a house, we will need to “unthaw” our credit before we go to the bank to see what type of loan we qualify for.

You will no longer have immediate access to new credit. If you go to a store and they convince you to open a credit card to save on your purchase, you will be unable to complete the application process.  You will be denied.  Likewise, you will no longer receive credit card offers in the mail.  (I personally find this a benefit, but others may want to open a line of credit without the hassle of unthawing their credit.)

How To Freeze Your Credit

To place a security freeze, you must pay $5 to $20, depending on the state you reside in, to the credit reporting agency.  They will give you a special number as confirmation.  Keep this special number in a very safe place.  Whenever you want to apply for credit, you must first unfreeze your account by paying another $10 and using your special confirmation number to prove that it is really you and not a thief.

You must freeze your credit with each of the three credit reporting agencies.

You can freeze your credit online or over the phone.

Here are the numbers to freeze your credit at the three main credit reporting agencies:

Equifax
Online Security Freeze
1-800-685-1111

Experian
Online Security Freeze
1-888-397-3742

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TransUnion
Online Security Freeze
1-888-909-8872

In most cases, you will need to give the agency your full name, address, social security number, credit card number and expiration date of the credit card (so the agency can charge you the fee to freeze your credit).  Most security freezes are in effect 5 business days after the request.

My husband and I decided to do this. It cost us $60 between the two of us to freeze our credit at each of the three agencies, but we felt the peace of mind was well worth the expense.

Have you ever frozen your credit?  What made you decide to freeze it?

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Published or updated April 14, 2013.

Comments

  1. I haven’t frozen my credit, but I’ve considered it.

    About 12 years ago, a now-defunct online electronics store was hacked and all of their credit card numbers were stolen. They reported it to VISA, who reported it to my bank, who reported it to me and told me to contact them if there were any odd charges.

    I looked back and discovered that I had been paying someone’s phone bill in Moscow for a couple of months.

    The real kicker? TCF didn’t think that was an “odd” charge and refused to deal with it as fraud. They lost a customer that day, and I haven’t used a debit card online since.

  2. A friend had frozen her credit when she found out that someone else had used her identity to open a credit card. She actually never noticed this as it was the first time she pulled her credit report. Apparently, the thief didn’t do any damage to her credit because the credit card bills were being paid on time. Anyhow, she reported the fraud and froze her credit.

    Now, she is worried because she’ll can’t ever leave her credit unfrozen due to fears that this person has her information and can repeat the fraud again. It can just become a major hassle once you know that someone else has your information and can do damage at any time. As you’ve come to see, it will become an inconvenience and a regular expense to freeze and thaw your credit.

  3. Melissa, I’ve done the same thing: frozen my credit…and I think it’s a great idea. Unfortunately, I had to do it after a case of identity theft. It’s important to note though that the credit bureaus are required to allow you to freeze for free if you’ve been a victim.

    Also, I’ve found that unfreezing for various things like a re-fi is surprisingly painless! You get a userid and password and can just logon to do a temporary unfreeze when you need it! The freezing process and recovering from identity theft however is not so painless….lot of paperwork!

  4. Very nice and informative post Melissa. It goes very well with my series of posts I have been writing this week about online shopping including how to stay safe when shopping online.

    I will be linking to this post in the future!

  5. Jason–I can’t believe they didn’t think a charge to Moscow was odd! When my identity was compromised, the bank told me to always use a dedicated account for my debit card, NOT my regular account in case the debit card was compromised. I had never thought about it before.

    Simon–Scary! Identity theft can happen easily, and most people don’t pull their reports like your friend did.

    Car Negotiation Coach–We haven’t unthawed our credit yet; glad to know it is painless.

    SavingMentor–I’ll check out your series.

  6. Hi Melissa!

    Nice first article. I have never had my identity/credit thefted; however, I did open up one of those spammy emails from eBay once…and filled in my social security number and password! I have no idea what I was thinking, but as soon as I clicked “send” I knew I had done something really stupid. I changed all of my passwords right away, and fortunately nothing ever came of it.

  7. You know what’s funny, Melissa? I was just talking to the Honeybee about this last night and telling her we need to do this.

    Thanks for all the dirty details on how to go about doing it!

    All the best,

    Len
    Len Penzo dot Com

  8. I have not done it myself, but helped a friend do it. We now have identity monitoring. We are also planning to buy a house in the next 2 yrs, so keeping a close eye on our credit.

    Nice post, Melissa!

  9. Yes, I have frozen it when someone hacked into my credit card account. Fortunately, the credit card company caught it and I suffered no loss!

  10. Interesting article. I had no idea this option was available. I had a credit card compromised, but the credit card company was so quick to resolve the issue, I didn’t feel the need to go further. Occassionally I would get calls from credit card companies warning me of suspicious behavior, but it was just me. They seem to be way better than before at catching fraud. Too good at times. I was traveling and used my card without informing them. They froze me temporarily thinking it was fraud! :)

  11. I froze the the spouse and I’s credit recently. I’ve become increasingly concerned about identity theft, what with so much hacking going on these days. Really though, I’m more concerned about my info being stolen from somewhere I was forced to give it out.
    Such as a utility bill, cox, a rental application…… these places ask for such an insane amount of personal information that it’s a treasure trove for thieves.
    We are looking to buy a house in a couple years and need to maintain our great credit.

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