With 2.4 million consumer-fraud reports totaling $8.8 billion in losses in 2022 according to the FTC, it’s more vital today than ever to consider security measures that protect your personal financial information. Seems like every week we hear about folks we know getting their identity stolen, but did you know that there is a way you can help protect yourself? It’s called a credit freeze.
Though no consumer safeguard is totally foolproof, Ameris Bank is here to help you understand the ways credit freezes work – and what they are helpful and not helpful for. Ultimately, you can decide if it’s the right fraud prevention option for you, in combination with other fraud prevention best practices.
Credit freeze vs credit lock
You may have heard of both a credit freeze and a credit lock. Both a credit freeze and a credit lock aim to achieve the same thing – preventing your sensitive, personal credit history and financial data from being hijacked and used unscrupulously. But while in most states, requests to impose or release a freeze are free of charge, credit locks do cost, usually when offered as part of banks’ financial security or consumer-protection packages.
How does a credit freeze work?
Credit freezes offer cold, hard protection on your credit.
- Also known as a “security freeze,” it restricts access to your credit data to prevent access to, or investigation into, your credit history by anyone other than yourself.
- Freezing your credit makes it extremely difficult for scammers. While your information is locked, hijackers are unable to apply for new accounts or lines of credit in your name, even if they possess sensitive personal information, such as your date of birth or Social Security number.
- Most states have rules covering credit freezes. Virginia, for example, requires credit-reporting agencies to put a freeze in place no more than one business day after a consumer requests one. And while credit reporting agencies in most states are not allowed to charge for freeze/unfreeze requests, some states allow agencies to charge to request a freeze or to release one.
Am I eligible for a credit freeze?
Credit freezes aren’t just for fraud victims and, in fact, can be useful for many other reasons.
- Credit freezes are open to anyone, anytime, whether or not you’ve been victimized, past or present.
- They provide you with greater control over your credit narrative, protecting your financial reputation from fake accounts and actions by scammers.
- They can be set up to protect family members, such as spouses and children age 15 years and younger. Known as a “protected consumer freeze,” parents and guardians of minors or people who are incapacitated can use this type of freeze to benefit their charges.
- Active-duty members of the military may want to consider a credit freeze, to safeguard their credit while they are deployed.
Impact of credit freezes
- Freezing your credit has no impact on your credit score or existing credit accounts.
- As the account owner, you retain access to your credit history, scores and reports. However, new creditors will be unable to access your credit information until you “thaw” the freeze by submitting a formal request to the credit bureaus to lift it (more about that below).
- Creditors and debt collectors with previous permission to access your existing accounts will continue to access your accounts as they normally would.
- Credit checks remain accessible if you apply for a job, rent an apartment or buy insurance.
Cautions about credit freezes
Don’t make the mistake of putting a freeze in place and then forgetting about it.
- Temporarily lift the credit freeze to open new credit card accounts, apply for loans, sign up for utilities and cellphone service, or make significant purchases, such as homes or cars.
- While there are no fees to initiate a credit freeze, you may need to pay them later, if you need to lift, then reinitiate, the credit freeze.
- Credit freezes won’t protect existing accounts from security breaches and fraudulent charges. It’s important to continue monitoring your credit score and reports for suspicious activity and potential fraud.
- Be diligent about remembering or safely storing PINs, passwords, and other identifying information, such as answers to security questions to access your accounts.
How do I start the freeze process?
Contact all three major credit reporting agencies – Experian, TransUnion and Equifax – to request a security freeze to your credit. Be prepared to submit identifying information: Your full name, mailing address, date of birth, and Social Security number.
You may also need a photo ID and a recent bill mailed to your address as proof of residence. Note that depending on the reasons you are putting your credit on hold, you may not need to freeze your credit with all three agencies.
How is the credit freeze lifted?
- To remove the credit freeze, again notify all three credit agencies. The freeze can be lifted as quickly as one hour – as required by federal law – if you contact the agencies directly over the phone, or within three business days if you submit a mailed request.
- Not all credit bureaus have the same procedure when it comes to security methods that creditors would need to access your account during temporary lifts. Be sure you know and follow them all.
- Credit-freeze rules also vary by state, so verify them with either your state consumer-protection agency or state banking regulator.
- Like locking your home’s doors or installing security cameras, freezing your credit can serve as a reliable means of financial protection.
Published February 2024
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.