Understanding the Credit Freeze: When To Use It and How

Understanding the Credit Freeze: When To Use It and How

(IntegrityPress.org) – Negative information on your credit report can cause major damage to your life. A low number might stop you from accessing loans for several necessary purchases, including a residential property where you can live. A credit freeze is a tool you may be able to use temporarily to keep your financial information private. Let’s examine who should use this technique, how it works, and when employing it might be a good idea.

What Does a Credit Freeze Do?

Also known as a security freeze, the tool prevents lenders from accessing your borrowing history, including removing access to your FICO score. People who have been the victims of identity theft or similar crimes that could affect their credit scores often use security freezes.

Still, a credit freeze doesn’t completely obscure a financial history from the world at large. A number of entities will still be able to see it, including any existing lenders, or companies you’ve paid to keep tabs on your credit, and some types of government agencies. Putting a security freeze in place won’t damage a score.

How To Implement a Credit Freeze

Since September 2018, you’re entitled to activate and deactivate freezes on your credit file free of charge, per federal law. To place one, you must contact each of the three main credit reporting bureaus, Equifax, TransUnion, and Experian. You can do this over the phone, through the organizations’ online portals, or by mail. The law requires the agencies to impose the condition within one business day of a request by phone or electronic communication. They have three days to comply with requests submitted by mail.

Free credit freezes won’t necessarily keep records completely private. Organizations other than the main reporting agencies, such as companies providing screening services, might have access to records and could charge fees to do the same thing.

Once you’ve initiated a freeze, you’ll usually receive a password or PIN allowing you or someone you designate to temporarily re-establish access to your credit records.

If you think you may have been the victim of identity theft, it’s imperative to keep an eye on your financial transactions. The best way to ensure a thief doesn’t cause irreparable damage to your credit is to catch them early by monitoring your records closely.

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