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Monday, April 15, 2024

Freezing Your Credit Card: Is It Necessary?

Identity theft and data breaches have been ignored for many years. However, recent research shows that this type of robbery has become very rampant with many Americans falling victim to it. Data leaks and identity theft reached their all-time highest in 2017 when over 17 million Americans were victims. Furthermore, there was an enormous data breach at Equifax, where credit report details of 134 million Americans are kept, which were stolen, inspiring the need to come up with a law to curb the situation.

On September 21st, 2018, new federal legislation came to effect which made credit freezes free for all Americans. Previously, locking and unlocking your credit report used to cost about $10. For newbies, a credit freeze is freezing of your credit report upon request. This prevents anyone else from gaining access to your credit report even if they have your social security number and other personal details about you.

Here are steps on how to freeze your credit:

Step 1: Contact the Major Credit Agencies

The first step is to contact each of the major credit bureaus to request to freeze your credit report. Each agency provides information on how to go about the process. In addition, you can freeze access to your credit report online, by phone, or by mail.

Step 2: Provide Personal Details

To freeze your credit report, you need to provide some personal details. Such information may include your full name, address, date of birth, and your social security number.

Step 3: Receive A Pin to Manage Your Freeze

Each credit bureau will issue you a personal identification number (PIN) or password after successfully receiving your request for a credit freeze. Here is an additional resource on how to take care of your credit during the freeze. If you need to unfreeze your credit report later on, then the PIN or password will be essential, so ensure you keep the information safe.

Step 4: Manage Your Credit Freeze

The big question here is, how long does it take to freeze your credit? Based on federal law, if you request to freeze your credit online or by phone, the credit bureau should do the freeze within one business day. On the other hand, unfreezing your credit report should be done within one hour upon your request.

If you request a credit freeze or lift via email, it should be done within three business days upon receiving your request.

When Should You Use a Credit Freeze?

It is always wise to consider a credit freeze if you have experienced the following:

  •             You have been a victim of a data breach.
  •             You have been a victim of identity theft.
  •             You want to protect yourself against identity theft for a child.

Here are some of the benefits of credit freezes:

  •             Nobody can open new accounts using your name.
  •             It does not affect your score.
  •             Freezing or unfreezing your credit is free.
  •             It minimizes cases of fraud in your name, especially if you are a victim of identity theft.