I Froze My Credit - Here's Why

When Equifax allowed the Social Security numbers of 145 million people to fall into the hands of thieves last year, I froze my credit at the three major credit reporting agencies to help prevent someone from stealing my identity. It wasn’t difficult, it didn’t take long and it was very cheap. Here’s why and how I did it, and what it means.

It seems now that these data breaches happen so often I think we’re all numb to it. I’m certainly guilty of complacency and make more than my share of “the Russians did it” jokes and then go along with my daily activities. But, having your Social Security number fall into the wrong hands can have serious consequences. Someone can steal your identity and run up large amounts of debt; they can file a false tax return and claim a refund; they may even try to use your health insurance to get medical care without paying for it. While freezing your credit isn’t a silver bullet, it is the best tool available to keep identity thieves at bay.

Why freeze your credit

A freeze prevents potential lenders such as a mortgage company or a credit card company from viewing your credit history. As a result, you can’t get a loan or a new credit card but neither can a fraudster who wants to borrow in your name. You can, however, temporarily un-freeze your credit in order to apply for a loan when you want.

How to freeze your credit

The process was actually quite simple – even for me. Log in to each of the three credit bureaus – Equifax, Experian and Trans Union. They will have a button on their site for credit freezes. Simply fill out the form to make it happen. It took me less than half an hour to complete all three. At the time, while Equifax was free because they were still feeling guilty, it cost $10 at each of the other two. The freeze lasts until you either permanently or temporarily un-freeze it. They will provide you, of course, with a PIN. Keep that PIN in an important place as you will need it to un-freeze your credit.

Note: If you’re married, it’s important for both you and your spouse to freeze your credits separately. Yes, you’ll have to pay the $10 again but, as we often apply for credit like mortgages together, this will close both the front door and the back.

Applying for a loan

I recently bought a new car and used the Honda low financing offer so they had to perform a credit check to complete the process. I asked them which credit bureau they used and they told me Trans Union. So, I simply called Trans Union and un-froze my credit – just with them – for three days. (They told me I could un-freeze for between 1 and 30 days) Since I had my PIN handy, it was simple and took about 5 minutes. Now, the un-freeze cost another $10 but Congress recently passed a law that prevents the credit bureaus from charging a person to un-freeze their own credit so that charge should go away in the future.

I definitely don’t fall into the category of an overly cautious consumer. I never purchase the extended warranties on cars or appliances, for instance. In fact, I get a kick out of telling the salesperson I believed them when they told me how reliable their product is, so I certainly don’t need any extra protection. I took this step of freezing our credit, however, because the consequences of having our credit stolen are just too steep a price to pay not to.