Under a new federal law, beginning today, you now can freeze and unfreeze your credit file at all three major credit bureaus for free. Freezing your credit is a good way to protect yourself from having someone obtain credit in your name.A credit or security freeze restricts third-party access to your credit file, greatly reducing the chances that a thief can use your identity to get a loan, credit card or other credit.
Identity theft has become an increasing concern because of the growing number of data breaches at major retailers and other businesses, including last year's breach at the Equifax credit bureau. And using bogus email and phone calls, computer viruses and other methods, scammers have tricked consumers into handing over their date of birth, Social Security numbers and other sensitive information.
Until now, many states have allowed the credit bureaus to charge most consumers a fee to freeze and unfreeze their files. But the Economic Growth, Regulatory Relief and Consumer Protection Act bans those fees.
The law also has other provisions designed to protect consumers from credit fraud. For instance, you now can freeze the credit files of your children who are under 16 years old. The law also requires credit bureaus to retain so-called credit fraud alerts for one year instead of just 90 days. Free fraud alerts are initiated by consumers, usually when they know or suspect that their personal information has been compromised. Alerts require businesses to obtain consumers' approval before opening new lines of credit in their names. Victims of identity theft still can get extended fraud alerts that last seven years.
A credit freeze is not without its downsides. For example, you must to freeze or unfreeze your file at all three major credit bureaus, Equifax, Experian and TransUnion, separately.
Then, when you apply for credit, you typically must unfreeze your file at one or more of the bureaus. While the law requires bureaus to lift a credit freeze within one hour for requests made online or by phone. even that can be inconvenient if, for example, you're standing in a checkout line trying to get instant approval for a retailer's credit card.
Still, that's not much of a hassle compared to what you'd have to deal with if someone obtained credit in your name.
What to do
Now that freezing and unfreezing your credit file is free, there's even more reason to do it, despite the hassles. And it's relative easy to request a freeze, especially online. You may even be able to manage your freezes file using a mobile app, such as the one from TransUnion, which is available at Google Play and the Apple App Store. Once you make a request by phone or online, a bureau must initiate the freeze within one business day. For a request made by mail, a bureau has three business days of receiving it to respond. Freezing and unfreezing your file doesn't affect your credit score.
When freezing your files, don't mistakenly opt for a "credit lock" instead. Though similar to freezes, credit locks offered by the credit bureaus are not covered by the new law, the FTC warns.
With a little planning, you can reduce or eliminate the hassle associated with lifting a freeze by doing it before heading out to a bank, car dealer or anywhere else where you expect to apply for credit. One trick is to try to find out in advance which bureau a credit issuer uses so you can lift only that freeze.
Usually it's a good idea to lift a freeze temporarily, for a period that you designate, after which the freeze will go back into effect.
When freezing your credit files, you may be given a personal identification number, which you'll need to unfreeze it, even temporarily. Don't lose it, and make sure no one has access to it.
Finally, even if you freeze your credit files, you still should check your credit report at all three major credit bureaus once a year, which you can do for free at AnnualCreditReport.com. Report any incorrect information or unauthorized accounts to the bureau immediately.
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