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The Equifax breach has left a lot of people worried about their credit and how to protect it. One way in which people are protecting their credit is to "freeze" their credit. Data security experts are recommending this step, especially to people who have already been a victim of identity theft. To freeze your credit, you contact all three major credit reporting agencies. When your credit is frozen, nobody other than your existing creditors or law enforcement can access your credit report without you lifting the credit freeze using a provided PIN or password. Instructions on how to freeze your credit are all over the internet. You can still get a credit report when you want or need one.
So, should you do it? Here are some things to consider:
1. It costs money - albeit a minimal amount. Anywhere from $2 to $20 (per bureau) each time you freeze it or lift the freeze so somebody can access your details. If you are shopping around for a loan, you may have to lift the freeze multiple times. A lender needs your credit details in order to approve you or to give you an accurate quote. (In most states the fees are waived for victims of identity theft). A few states - including Maine, South Carolina and Maryland have made fees for freezing credit illegal.
2. It takes time. If you have frozen your credit, it can take a while to unfreeze it. This delay could slow down your move or even cost you your dream house as somebody else snaps up the property while you are waiting on loan approval. The bureaus are required to lift the freeze within three days - but that three days can be a long time if you are negotiating for a house. Also, it's worth remembering that after the Equifax breach their phones were clogged and their website crashed with all the people trying to freeze their credit.
3. A credit freeze does not protect you if somebody steals your credit card (although fortunately your credit card company has ways to help). Application fraud is only one of the eleven most common forms of credit card fraud. The most common is, in fact, account takeover, where the thief will pretend to be you and change the shipping and billing address on the card and get themselves sent a new card. Also common are CNP fraud (using your card number and card verification code to make a purchase over the internet or over the phone) and card skimming (copying the electronic information from your card and using it to make transactions or a fake card. In other words, a credit freeze is not complete protection and may lead to a false sense of security.
4. If a credit bureau is breached, then the PIN numbers used to unfreeze credit are also vulnerable to being stolen - and you may feel that because your credit is frozen you are safe and miss something for a considerable amount of time (And Equifax in particular used PINs which weren't secure in the initial period after the breach). If a thief can get hold of the pin or password to unfreeze your credit then the only person being inconvenienced by it...is you.
So, should you freeze your credit? If you know you are about to go into the home buying process, you may want to wait on a freeze until afterwards. For the most part, though, it is a matter of weighing up the risk against the inconvenience and hassle - and for most people freezing credit is more trouble than it's worth. Unless you have been specifically advised to do it by an identity theft expert, you should think very carefully before taking this step. Of course, if you have no plans of shopping for a car, house, or anything else that requires a loan in the near future you may find you feel more comfortable with the extra protection.