What is a Credit Freeze?

When we learn that a client is financing or leasing a car, one of the first questions we ask is: "is your credit frozen" - and we get one of three answers:

• Yes, I'll thaw it
• Yes, I'll have to find my passwords
• No, what's that?

Let's talk about the third response and answer "What is a credit freeze?"

A credit freeze locks your credit profile at each of the three major bureaus, which prevents anyone (including you) from opening new lines of credit in your name. It does not affect your existing accounts, your credit score, or your ability to use your credit cards. Think of it as closing the front door and locking it when you leave the house. You can still live your life normally, but no one can slip in behind you and you can always enter again with the key.

Identity theft is at an all-time high

Bad actors use stolen personal identification information to apply for loans, credit cards, and even car financing. A freeze stops those applications from being processed because lenders cannot access your report while the freeze is active.

Federal law requires Equifax, Experian, and TransUnion to offer freezes at no charge. You can set them up online in under ten minutes per bureau. You create a login that allows you to temporarily unfreeze when needed, like during a car purchase or mortgage application.

Be careful, because one of the credit bureaus will try to trick you into an "upgrade" to pay for the same service with a different name; but, just click past that and get to the free stuff!

A fraud alert is not enough

Many people assume a fraud alert offers the same protection, but it only requires lenders to "verify identity." A freeze completely blocks access until you lift it.

It protects your children too

A child's Social Security number is a prime target because it often goes unused for years. Parents can (and should) freeze a minor's credit profile to prevent long-term damage.

When you need to unfreeze

If you are applying for a car loan or any type of financing (like a credit card), you can temporarily lift the freeze for a specific bureau or for a set number of days. Many people lift only the bureau that specific lenders use.

My Thoughts?

It is easy, free, and fully under your control, as long as you don't lose your login information!

I'm not going to include individual links for each credit union; because with such secure information, nobody should click random links (even from me). However, here is a .gov website with more information: www.usa.gov/credit-freeze