Since the Equifax data breach in 2017, news headlines have highlighted how important it is to monitor your credit score. Now, the credit reporting agencies are making it easier to be proactive when fighting credit fraud. As of September 21st, a new federal law allows you to freeze your credit file for FREE at each of the three credit agencies.
A credit freeze is a way to shut off your credit and prevent it from being used. A thief with ill intent will be unable to open any kind of credit line in your name. Your credit will “thaw out” only when you contact the credit reporting agencies and request that they unfreeze your credit. This requires that you establish either a password protected account or a PIN in order to verify your identity with the reporting agencies.
A credit lock, not to be confused with a credit freeze, is another way to close off your credit from being used. The lock differs from the freeze in a few ways. It normally costs an upfront fee or a monthly fee to turn on the lock and maintain the lock. The credit lock is supposedly faster when locking and unlocking your credit report but with the proper planning, a freeze may still be a good option. The new regulations surrounding the timing of the credit freeze options offer similar benefits, protection and options for free.
The new federal law relating to a credit freeze allows you to call each agency and request that they freeze your credit. If you make this request over the phone, each agency is required by law to establish a freeze on your credit within one day of receiving your request. If you call to remove the freeze because you want to establish another form of credit, they must remove the freeze within one hour of your phone request.
A credit freeze is a proactive measure to block unwanted credit lines from opening without your authorization. If you have already had your identity stolen, you can follow the link here to take you to a blog, written by CCMI, with steps on how to proceed.
If you are trying to prevent this type of credit fraud in the future, and do not need to setup new credit or finance a home or car in the near future, you may want to consider setting up a credit freeze. You would do this by calling the each of the 3 major credit reporting agencies listed below and asking for a freeze to be placed on your credit.
Equifax
https://www.equifax.com/personal/credit-report-services/
800-685-1111
Experian
https://www.experian.com/freeze/center.html
888-397-3742
Transunion
https://www.transunion.com/credit-freeze
888-909-8872
During the process, if you have not already done so, you will set up an account with each agency and you will establish a PIN number. This PIN will be the key to unlocking your credit in the future. Make sure to keep this PIN somewhere safe that you will remember, because going through the identity verification process with each credit reporting agency can be very time intensive.
For more information, you can visit any of the credit reporting agencies online using the links provided above, or you can call CCMI and we would be happy to discuss a few of the benefits and drawbacks with you.
CCMI provides personalized fee-only financial planning and investment management services to business owners, professionals, individuals and families in San Diego and throughout the country. CCMI has a team of CERTIFIED FINANCIAL PLANNERTM professionals who act as fiduciaries, which means our clients’ interests always come first.
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