Freeze Your Credit Now

(Image from Dealing with Dementia)

In early 2015 I read about how freezing one's credit can provide protection against one consequence of identification theft: a crook being able to open a new loan, credit card, or line of credit in my name.

I paid $10 to each of the three major credit-reporting agencies, Experian, Transunion, and Equifax, not to furnish credit reports to new lenders who come asking. It has been a minor hassle to unfreeze the accounts to obtain car leases and a new Apple Card, but it's been worth the $10 charge to sleep a little easier every night.

Credit freezes have cost nothing since 2018, so everyone should do it.

The good news is that freezing your credit is less of a pain than it used to be. It became free and simpler under a 2018 federal law following the massive Equifax breach the year before. But it does take a little more effort than locking your door...

Aside from making it a little less convenient to apply for a loan or credit card, freezing your credit costs nothing and has virtually no downside. It doesn’t hurt your credit score. Landlords and employers can still run a credit check. Existing creditors can increase your credit limit.

Making it harder to open new lines of credit might also be a form of financial discipline, since you won’t be able to sign up for buy now, pay later offers or store credit cards without first unfreezing your credit...

To freeze your credit, you must go online and request a freeze at all three of the major credit bureaus: Experian, TransUnion and Equifax. Reversing the process requires going through each bureau again.

To prove who you are, you will need to have a government ID, like a driver’s license, pay stubs and utility bills. Once set, it should take less than a half-hour to complete the process, says Miklos Ringbauer, a financial adviser in California. He encourages clients to keep their credit frozen and only lift the freeze for short periods, such as when they plan to apply for loans. After the initial setup, the freeze can be turned on or off with a few clicks, he said.

Freezing credit doesn't relieve one of the need to review one's existing bank, credit-card, stock-brokerage, retirement, etc. accounts for unfamiliar transactions, but it's a necessary part of a scam-protection program.