“This is a significant thing because so many people should freeze their credit,” a source tells Moneyish.
Freeze it, it’s free.
You can freeze your credit — which means that no one, including you, should be able to open new lines of credit in your name — for free this week. Plus credit freezes and unfreezes will happen faster, the FTC notes: “If a consumer asks for a freeze online or by phone, the credit reporting agency has to put the freeze in place no later than the next business day. If the consumer wants to lift the freeze – for example, to finance a new phone or fridge – that has to happen within an hour.” This is part of the new law, called the “Economic Growth, Regulatory Relief, and Consumer Protection Act” that takes effect on Sept. 21st.
“This is a significant thing because so many people should freeze their credit,” says Matt Schulz, chief industry analyst for CompareCards.com – explaining that it can help you prevent thieves from opening up new credit lines in your name. “A credit freeze simplifies things a lot with identity theft because it really does slam the door on people trying to get credit in your name.”
And identity theft is a major problem in America: “In 2017, there were 16.7 million victims of identity fraud, a record high that followed a previous record the year before,” the Insurance Information Institute notes.”Criminals are engaging in complex identity fraud schemes that are leaving record numbers of victims in their wake. The amount stolen hit $16.8 billion last year as 30% of U.S. consumers were notified of a data breach last year, an increase of 12% from 2016.”
In the past, a credit freeze — also known as a security freeze — might have given consumers pause. Indeed, explains Ashley Dull, the editor in chief of CardRates.com, it used to, in many cases in many states, cost between $3 – $10 per credit bureau to do this, so if you froze your credit with all three bureaus (Equifax, Transunion, Experian) you might spend up to $30; plus you’d have to pay them again to unfreeze your credit.
On Friday, it’s required to be free to freeze and unfreeze your credit (Transunion and Equifax already have made them free; Experian will on Friday) — and that makes putting a freeze on your credit, even if you haven’t been notified of a breach, compelling: “There’s an argument to be made that the default state for your credit should be frozen,” Schulz says, citing the high number of breaches that happen each year. You could unfreeze it if you wanted to open up a new line of credit, he adds, but keep it frozen if you didn’t. Bull agrees: “It’s not a bad idea all all, it provides that added layer of security, no one could open any new accounts and you and only you can open new lines [of credit] by unfreezing.”
Even if you don’t want to keep your credit frozen, Kimberly Foss, president and founder of Empyrion Wealth Management, notes that you should put a freeze on your credit anytime you receive “notification from your bank, credit card company, or a merchant with whom you have a charge account … that the possibility of a data breach exists.”
Not many people freeze their credit — even after a breach. Indeed, only about one in five consumers did a credit freeze following the Equifax breach last year, according to Krebs on Security.
It’s important to note that freezing your credit will not stop a thief who already has your credit card number from using it; it merely stops them from opening new lines of credit. But Schulz, says, this is a significant portion of all identity theft so it’s key to freeze your credit.
It’s also not that hard to do it, says Dull — who notes that it just involves filling out some personal information with each of the credit bureaus (you can find the info on how to do it on each of their websites as well as on IdentityTheft.gov starting Friday). Note that too effectively freeze your credit, you must follow instructions for doing so at all three credit bureaus. These links will walk you through it:
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