• Skip to main content
  • Skip to primary sidebar
  • Skip to footer
MENUMENU
  • Home
  • About Us
    • Our Philosophy
    • Choosing a Financial Planner
    • Legal and Regulatory
    • Team
    • Careers
    • Awards & Recognition
    • Contact Us
  • Our Services
    • Financial Planning
    • Ongoing Financial Guidance
    • Portfolio Management
  • Financial Planning Basics
    • Continuing Care Retirement Communities (CCRCs)
    • Retirement Planning and Cash Flow
    • Social Security
    • Taxes
    • Insurance & Risk Management
    • Investments
    • 401(k)
    • Real Estate
    • College
    • Liquidity
    • Divorce
    • Estate Planning
    • Sensible Updates
  • Resources
    • Blog
    • Financial Planning for Older Adults
    • Webinars
    • Videos
    • Financial Planning Guidebook
    • Continuing Care Retirement Communities Guidebook
    • Primers
    • Financial Planning Links
    • Client Login
  • Contact Us
Sensible Financial Planning

Sensible Financial Planning

Follow Us

  • Facebook
  • LinkedIn
  • Twitter
Client Login

Call Us Today
781-642-0890

Freezing Your Credit

by
Frank Napolitano
J.D., CFP®, CFA® Charterholder - Senior Financial Advisor

October 29, 2018

Freezing your credit is now free (and probably makes more sense than ever)

In April I wrote an article about the steps Sensible Financial takes to protect our clients’ information along with actions you can take to protect yourself, such as using strong passwords and enabling multifactor authentication where possible. A newly-passed law now makes it easier to protect your credit information.

Earlier this year, the President signed into law the Economic Growth, Regulatory Relief and Consumer Protection Act. Most public comments about the law focused on its loosening of restrictions previously placed on banks following the Great Recession. A less-well-known section of the legislation that went into effect on September 21st makes it free for consumers to freeze and subsequently thaw their credit files at the three major credit bureaus. Previously it had cost between $3 and $10 depending on where you live.

  • A creditfreeze, also known as a security freeze, prevents someone, including you (!), from opening a new line of credit under your name.
  • A credit thawundoes a credit freeze, allowing a person to open a new line of credit, perhaps for a car loan or a cell phone account.

The law is important since many credit experts recommend freezing your credit to minimize the risk of credit fraud and identity theft. The Equifax breach exposed the personal data of roughly 150 million American citizens, or roughly one in two people. This means there is a high likelihood that some of your most sensitive information, such as your Social Security number, date of birth and/or driver’s license, has been compromised.

Equifax has an online website, www.equifaxsecurity2017.com, where you can check to see if your data was compromised. You will need to provide your last name and the last six digits of your social security number. If you are uncomfortable with providing this information over the internet, you can call Equifax Consumer Care at 888-548-7878 seven days a week between 8 AM and midnight EST (as of this writing the automated assistant does not provide a specific option to speak with a representative about whether you were affected by the breach, but I was able to reach someone by pressing the number three).

Whether or not you were affected by the Equifax breach, there have been several high-profile data breaches over the past few years, including Yahoo (3 billion affected users), Target (110 million), and Facebook (50 million), to name a few. In all these instances, some sensitive personal data was compromised. And since there may be no way of knowing with certainty whether you were affected (or whether you will be in the future), it is likely in your best interest to freeze your credit. (A credit lock is a more convenient but less secure alternative to a credit freeze; although not covered here, you can read more about the differences between the two at Consumer Reports here).

How to freeze your credit

For a credit freeze to be effective, you must freeze your credit at all three bureaus. You can do this online (which requires you to submit your full Social Security number) or over the phone. Before you freeze your credit, familiarize yourself with the following steps (answering too many questions incorrectly can lead to delays). Also, make sure you have a secure method of storing your credit freeze information (you will need it to thaw your credit in the future).

Step 1. Have your Social Security number, date of birth, past addresses and information about recent loans, e.g. mortgage, car loan, readily available.

Step 2. On a home computer (not a public Wi-Fi) or over the phone, contact each bureau using the information below. After verifying your information, select the option to freeze your credit.

Equifax: www.freeze.equifax.com; 800-685-1111

Experian: www.experian.com/freeze/center.html; 888-397-3742

TransUnion: www.transunion.com/securityfreeze; 888-909-8872

Step 3. Record your Personal Identification Number (PIN) and username and password (I needed this for Transunion but not for Equifax or Experian) and store in a safe location for future reference. You will need this information to thaw your credit in the future.

Things to consider

There are several considerations to take into account before freezing your credit. I’ve listed what I think are some of the most important factors below.

  • If you have not yet opened a My Social Securityaccount, do so at https://www.ssa.gov/myaccount/ before freezing your credit. After you freeze your credit you may be prevented from opening an account as the Social Security Administration uses information in your credit profile to verify your identity.
  • Credit freezes are made on an individual basis. If you are married, each spouse must freeze their own credit.
  • If you have children, consider freezing their credit. The law new requires credit bureaus to create and freeze files for children under the age of 16 at their parents’ request. (Children 16 and older can request a freeze themselves). This is particularly important as identity theft among young people can go unnoticed for years, perhaps until they apply for their first credit card or apartment and get rejected.
  • A credit freeze protects against opening new lines of credit. If a thief already has your bank information or credit card number, freezing your credit will not prevent unlawful transactions. You still should regularly check your bank and credit card statements for irregularities.
  • A credit freeze may be inconvenient if you frequently open new accounts (this may include opening accounts at an existing bank).
  • There is a fourth, lesser-known bureau called Innovis. Although they collect less data than the big three, some experts recommend freezing your credit there as well. You can do this (easily) online, by phone, through the mail, or if you happen to be in Pittsburgh, PA in person. Instructions here.

The new law makes the credit freeze decision easier. Even if you regularly open new accounts or will be applying for credit in the near-future, freezing and subsequently thawing your credit is now free. And although it’s no guarantee that you will never be the victim of fraud, it’s one of the best things you can do to protect yourself.

More articles by Frank Napolitano Filed Under: Financial Planning Basics Tagged With: Credit Health

Primary Sidebar

Sign up for our newsletter

Recent Posts

The picture shows a college campus and students because the article is about FAFSA.

The FAFSA Simplification Act and Financial Aid

The FAFSA Simplification Act makes adjustments to the FAFSA. How will it affect your college student and their financial aid?

The picture shows an older couple hiking on a beautiful day to represent retirement and the SECURE Act.

The SECURE Act 2.0 and Retirement

The SECURE Act 2.0 builds on the initial SECURE Act of 2019, changing the retirement planning space, and increasing retirement flexibility.

Categories

  • College Planning
  • Cybersecurity
  • Estate Planning
  • Financial Planning Basics
  • Financial Planning Videos
  • Insurance & Risk Management
  • Investments
  • Retirement Planning and Cash Flow
  • Sensible Updates

Topics

401(k) Annuities bond returns Bonds Charitable Giving College Planning Company Updates Credit Health Disability Insurance diversification Divorce Donor Advised Funds Economy estate planning Federal Reserve Financial Goals Financial IQ financial planning Financial Strategy Forbes.com housing inflation Investments Investment Strategy IRA Legislation Liquidity Long-Term Care Medicare Mortgage Older Adult Living Recommended Books remote work Retirement Choices retirement planning Retirement Savings Risk Management Securities Social Security Social Security benefits Staff News Stock Market Stocks sustainable portfolios taxes

authors

Rick Miller
Sensible Staff
Frank Napolitano
Rick Fine
Josh Trubow
Chris Andrysiak
Marie St. Clare
Laura Williams
Gyb Spilsbury
Chuck Luce
Aimee Plouffe Polley

Footer

Services

  • Financial Planning
  • Financial Guidance
  • Portfolio Management

About Us

  • Our Philosophy
  • Team

Resources

  • Blog
  • Financial Planning Guidebook
Sign up for our Newsletter
Awards & Recognition

Follow Us

  • Facebook
  • LinkedIn
  • Twitter

Locations

Massachusetts

203 Crescent Street, Suite 404

Waltham, MA 02453

Phone: (781) 642-0890
Fax: (781) 810-4830

 

California

600 B Street, Suite 300

San Diego, CA 92101

Phone: (619) 573-4131​

Disclaimer

This content reflects the opinions of Sensible Financial®. We may change it at any time without notice. We provide this content for informational purposes only. Although we endeavor to keep the information up-to-date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability for a particular purpose or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. We do not intend the information contained in this website as investment advice and we do not recommend that you buy or sell any security. We do not guarantee that our statements, opinions or forecasts will prove to be correct. Past performance does not guarantee future results. You cannot invest directly in any index. If you attempt to mimic the performance of an index, you will incur fees and expenses which will reduce returns. All investing involves risk. You can lose any money you invest. There is no guarantee that any investment plan or strategy will succeed.

More important additional information and full disclaimer.

Copyright © 2023 Sensible Financial · All Rights Are Reserved
Legal Disclosure