The Big Freeze: How to Protect Your Credit from Fraud

It seems like every time you read the news there is another huge data breach that puts you at risk for credit fraud.  In 2016 there were about 15.4 million consumers affected by fraud.  The problem is so rampant that one has to wonder if there is anything that can be done to stop predators from opening up fraudulent accounts in your name.  The good news is, there is something you can, it is cheap, and reasonable easy: it is called a credit freeze.

A credit freeze will stop anyone from opening a new credit account in your name.  In fact, a freeze is so efficient, even you can’t open a new account without unfreezing your credit.  I froze my credit well over five years ago and have never once regretted the decision.  Below, I will lay out exactly what you should do to protect yourself.       

Step 1 – Review all 3of your credit reports.  Before you freeze your credit, visit www.AnnualCreditReport.com.  This website was set up to comply with the fair credit reporting act and is the only site I trust.  There will be a few hoops to jump through to get your reports, but it is important that you review all 3 bureaus (Equifax, Transunion, and Experian).  Take good notes of any report numbers and make a paper or pdf copy of everything you can.  This information will be necessary if you need to dispute any fraudulent accounts or misinformation.  You will need to repeat the process for each credit bureau.

Step 2 – Dispute any derogatory or misinformation.  Disputing any derogatory information will force the creditor to verify any late payments.  For more information, see Credit Repair Made Easy on my website.

Step 3 – Freeze your credit.  You will need to visit each credit bureau individually and complete their online forms.  The cost to freeze your credit is about $10 per bureau and it will cost another $10 – $15 each time you wish to unfreeze your credit.  After November 21, it is reported that Equifax will increase their fees to about $30.  When you freeze your credit, you will be giving a special PIN.  Make sure you keep this number in a safe place, if you lose it, you will have a very hard time unfreezing your credit

What happens if you want to open a new credit account?  If you are checking out at the department store and the sales clerk asks if you would like to save 10% on your purchase by opening a new account, forget about it!  It won’t happen.  To unfreeze your account, you will need your special 10-digit PIN, access to the credit bureau, and you will pay $10 – $30 for the “thaw”.  Now, if you are shopping for a new car, home loan, or other new credit account, it can be a little troublesome to unfreeze your credit but this also prevents you from impulse purchases and succumbing to high pressure salespersons.  Most car dealers only use one bureau so make sure you ask which account to unfreeze.  You can unfreeze your account for a specific company, a period of time, or permanently.

While it may cause you some inconvenience to open new accounts, the ability to rest assured that your credit is locked down is priceless.   

For more information of help, give me a call or send me an email.  I will be happy to help.       

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