Note: This is one of my Betty’s Best Tips, or columns on popular subjects.
I’ve been a big advocate for placing a credit freeze on your credit reports with the various credit reporting agencies, especially in this day and age when there are so many reports of massive data breaches, and Identity theft.
Thanks to a law that went into effect on Sept. 21, 2018, it is now free nationwide to place or lift your credit freeze (The cost used to vary state by state and it was $5 per freeze in Ohio). That’s great news and long overdue. We should be able to hold the keys to protect our own credit and shouldn’t have to pay for it.
Here is information from a column I wrote when first announcing the free credit freezes and why it is important to place a freeze, in my opinion:
“This is excellent news for consumers,” Eva Velasquez, president and CEO of the San Diego-based Identity Theft Resource Center, said in a recent phone interview. “It removes one more roadblock or barrier for people to take control of their identity and practice those good identity hygiene habits.”
Consumer advocates have long said it was not fair to make people pay for the right to protect their own financial identities.
“While it may seem this happened fast in the wake of the Equifax breach, I can assure you that advocates all over the country have been working on this for a long time,” she said. “This is a big win for consumers. It’s about choices.”
A credit freeze is not necessarily for everyone, Velasquez said. Some people cite the inconvenience factor.
“I’ll let them make that judgment call,” she said. “But if people want to take that proactive step, not being able to afford it should not be the reason. Whether people take advantage of this or not, they have the choice to do so and it’s not based on economics.”
The delay in implementation of the law is partially to give the credit bureaus time to get their systems ready for the free credit freeze and lifts, said Susan Grant, director of consumer protection and privacy for the Washington, D.C.-based Consumer Federation of America.
But Grant said that her agency will be “watching carefully to see how they actually work and whether there are any unnecessary obstacles placed in consumers’ way to either freeze their files or lift the freezes when they need them.”
Representatives for the three credit bureaus directed questions to the Consumer Data Industry Association (CDIA), or national industry trade organization.
CDIA President and CEO Francis Creighton said, “We are pleased to note the enactment of the Economic Growth, Regulatory Relief and Consumer Protection Act, which will help consumers by improving the economy and assisting in the fight against identity theft.”
The best way to freeze and lift your credit is to go directly to the bureaus directly: Equifax, Experian and TransUnion.
What’s a credit freeze?
Credit freezes are a proactive way for consumers to protect their financial identities, especially in light of the massive data breaches that are all around us.
The best analogy I can give is it is locking all of the doors to your house. You wouldn’t go to sleep or leave your house with only your front door locked, but leave the side or back door unlocked, would you?
What a credit freeze does is lock your credit from everyone — including you — without the proper key. That means that if an identity thief wants to try to take your name to use your good credit, the creditors wouldn’t be allowed to grant the thief credit without your permission.
It is easy to “lift” or “thaw” your freeze, but takes some planning. When you place your freeze, you establish a PIN number to use when you go online or call the credit bureau to temporarily or permanently lift your freeze.
You don't have to lift your credit at all three if you don't need to. For instance, when I've bought a car and was looking for credit, I've asked the dealer which credit bureau they use for their credit checks. Some creditors know and others may work with banks that check all three bureaus, so you may have to lift all three. But when I've done this, I've just lifted the freeze for a short period of time.
Having a freeze does mean you can’t get “instant” credit, unless you lift your freeze.
I know people use both the online and phone systems to place or lift their credit freezes.
I have found the online systems to be so easy and quick, compared to talking to an automated phone system.
Credit freezes do not affect your current credit, only when new credit is sought. So you can still use your current credit cards and accounts.
A few other pieces of the law that will benefit consumers include:
‒The current 90-day free fraud alert will move to a one-year free fraud alert. Some advocates say the fraud alert, which is a personal statement on your credit report saying you may be the victim of identity theft or a data breach and you want potential creditors to be wary of granting new credit, is worthwhile. Personally, I am not a fan of the fraud alerts because creditors may not see the statement and it doesn’t prevent new credit.
‒The law also allows parents to freeze credit for a minor child up to age 16. Currently, credit bureaus say they don’t knowingly have credit reports for minors and there are many hoops (paperwork) for parents to place a freeze. The law does not address children ages 16 to 18, and I still am advocating that parents should be able to freeze credit for those ages. It’s not good to leave those kids — on the verge of adulthood — unprotected.
Here’s how to contact the bureaus:
‒Equifax: 888-298-0045, Equifax Security Freeze, P.O. Box 105788, Atlanta, GA 30348-5788 or https://www.equifax.com/personal/contact-us
‒Experian: 888-397-3742, Experian Security Freeze, P.O. Box 9554, Allen, TX 75013 or https://www.experian.com/freeze/center.html.
‒TransUnion: 888-909-8872, TransUnion, P.O. Box 2000, Chester, PA 19016 or https://www.transunion.com/securityfreeze
Credit freeze and your Social Security online account
Since Social Security numbers are key to ID theft and they are usually part of a data breach, Eva Velasquez, CEO of the Identity Theft Resource Center, said it could be a good idea for people to proactively establish their MySocialSecurity account, which is online access to Social Security’s website, www.socialsecurity.gov so a hacker doesn’t do it and wreak havoc with your benefits.
Social Security, however, checks your credit with (ironically) Equifax in its verification process. So if you have a credit freeze, you must first lift it in order to establish your Social Security account.
My husband and I did this, but not before I first wasn’t able to accurately answer questions about things in my credit report (that’s a whole different column about how there are often mistakes in your credit file), so I locked myself out of the Social Security system for 24 hours. We opened my husband’s account without a problem.
This might be something you want to do, even if you’re years away from collecting Social Security. You do need to be at least 18 to open an account. If you don’t have computer access, perhaps ask a trusted friend or go to the library. You can also create an account without removing the security freeze or alert by visiting a Social Security office.
Also, Social Security allows you to freeze access to your Social Security account, but I have confirmed with the government that by blocking access, you are blocking ALL access, both by phone and electronically to your Social Security account. So Social Security only recommends this in cases of actual identity theft. If you do want to block all access, you can do so online. It may be possible to request it by calling 800-772-1213.
Consumer columnist Betty Lin-Fisher can be reached at 330-996-3724 or email@example.com. Follow her @blinfisherABJ on Twitter or www.facebook.com/BettyLinFisherABJ and see all her stories at www.ohio.com/betty