October 19, 2017

Freezing Your Credit

The recent theft of data on 145 million Americans at Equifax, combined with horror stories about the filing of fraudulent tax returns with the IRS, had me concerned about identity theft. As a result, I took an hour to review and secure my credit, the steps of which I outline below for those who might be interested in pursuing this measure.

Before talking too specifically about protecting your credit, let me begin with the obvious: there are unlimited ways criminals may try to access and exploit your personal information and the most important defense against them is common sense. Ignoring email attachments from strangers, being skeptical of links included in emails, never giving your bank number to Nigerian princes, and shredding documents with personal information are the sorts of things we should all be doing in 2017.

We should also be checking our credit reports annually. The Federal Trade Commission’s website – annualcreditreport.com – provides consumers access to all three of their credit reports each year (Experian, Equifax, and TransUnion), at no charge. It took me less than 20 minutes to review my credit report at each agency on annualcreditreport.com and, happily, there were no unpleasant surprises.

If you do not have any immediate needs for credit (and if there is no fraudulent activity on your credit reports), then you may want to look into freezing your credit with all three major credit reporting agencies as a protection. We don’t necessarily recommend this as the only or best way to protect your credit, but it can be a helpful security measure if it fits your situation.

I was familiar with the concept of freezing one’s credit, but wanted to learn more about exactly what the process was and how it works, so I went to the source: the user agreements for each reporting agency’s credit freeze option. Here is how TransUnion describes the process:

“A SECURITY FREEZE WILL REQUIRE YOU TO CONTACT US IF YOU ARE SEEKING CREDIT, IN ORDER TO REQUEST THAT WE TEMPORARILY LIFT YOUR FREEZE TO ALLOW US TO REPORT YOUR TRANSUNION CREDIT FILE TO THE CREDIT GRANTOR YOU IDENTIFY. A SECURITY FREEZE MAY HINDER YOUR ABILITY TO IMMEDIATELY OBTAIN CREDIT TO MAKE MAJOR PURCHASES. ONLY YOU CAN REQUEST THAT A SECURITY FREEZE BE PLACED ON YOUR TRANSUNION CREDIT FILE AND ONLY YOU CAN REQUEST THAT THE SECURITY FREEZE BE REMOVED OR TEMPORARILY LIFTED. A SECURITY FREEZE WILL REMAIN ON YOUR TRANSUNION CREDIT FILE UNTIL YOU REQUEST THAT THE SECURITY FREEZE BE PERMANENTLY REMOVED, OR YOU REQUEST THAT A TEMPORARY LIFT OF THE SECURITY FREEZE FOR A SPECIFIC CREDIT GRANTOR/CREDIT FILE USER, OR DATE RANGE.”

In plain English, this means that freezing your credit makes it a little more difficult for you to get new lines of credit (because you have to request the removal of the freeze) and significantly more difficult for someone else to open a line of credit in your name. Each agency also offers you the chance to “lock” your credit, which comes with slightly less protection but easier options for “locking” and “unlocking” your credit. I chose to freeze my credit at each of the agencies by visiting the websites I was directed to by annualcreditreport.com:

Experian and TransUnion each charged me a $10 fee to freeze my credit and all three agencies required some background information to confirm my identity (previous addresses, credit cards, etc). I was done with the process in under 20 minutes and paid a total of $20.

There is no perfect defense against the theft of important data. We pride ourselves in the steps we take to protect our clients’ personal information here at Arnerich Massena and strive to provide our clients with guidance on securing their data (and their futures). Hopefully, my experience can help you if, based on your facts and circumstances, you choose to freeze or lock your credit. If you would like to discuss ways in which credit impacts long-term financial planning, we’re happy to have that conversation too.