Freezing credit will now be Free. So Consider it!

Freezing credit will now be Free. So Consider it!

by Advisor Websites on Jan 24, 2019

SF Chronicle Section D September 17, 2018

Consumers will soon be able to freeze their credit files without charge.  So if you have not frozen your files – a recommended step to foil identity theft – now is a good time to take action, consumer advocates say.  Security freezes, often called credit freezes, are “absolutely” the best way to prevent criminals from using your personal information to open new accounts in your name, said Paul Stephens, Director of Policy and Advocacy with Privacy Rights Clearinghouse, a consumer advocacy nonprofit group.

Free freezes, which will be available Friday, were required as apart of broader financial legislation signed in May by President Trump. Two of the three major credits reporting bureaus, Equifax and TransUnion, have already abandoned the fees.  The third, Experian, said it would begin offering free credit freezes on Friday.  To be effective, freezes must be placed at all three bureaus. The Federal Trade Commission says that when this takes effect, its identity theft website will provide links to each bureau’s websites.

A security freeze makes it harder for criminals to use stolen information to open fraudulent accounts and payment history, which card companies and lenders use to decide whether you are likely to pay your bills.  If you freeze your file, the bureaus will not provide information to lenders unless you “thaw” the freeze first, using a special personal identification number. The availability of free security freezes comes more than a year after a huge data breach was discovered at Equifax.  The breach compromised the personal information, including Social Security numbers, birth dates and other sensitive details, of more than 145 million people – nearly half the population of the United States.

Consumer advocates hope that making freezes free will spur more consumers to use them. (The new law requires that thawing a freeze must be also free.)  Brett Merfish, a lawyer in Austin, Texas, said she froze her credit at all three bureaus several years ago after her personal information was used to open “a steady flow” of fraudulent credit card accounts. The freeze process was “tedious” she recalled, but ultimately effective because she no longer has problems with fake accounts. “It’s worth it to do it,” she said.  One credit bureau, TransUnion introduced a smartphone app, my-TransUnion, this month that consumers can use to more easily freeze and thaw their credit.

The new law also requires credit bureaus to allow parents to create and freeze credit files for their children under 16, to prevent their identities from being misused. The FTC offers information on what to do.  Checking your credit report periodically is also wise.  You are entitled to one free copy each year from three bureaus. Google these bureaus and the websites will come up for you.

– TransUnion,
Experian, Equifax, NCTUE.