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Why You Should Think Twice About Freezing Your Credit


The recent Equifax data breach potentially put more than 143 million Americans’ sensitive personal information like social security numbers, birth dates, driver’s license numbers and more at risk.

With such a big hit, what if your information has been compromised? The knee-jerk reaction is to freeze your credit. But is that a good idea?

Many people don't realize how often their credit information may be accessed outside of applying for credit.

Gerri Detweiler, education director for Nav.com, where business owners can check and monitor their business and personal credit for free, offers her advice, “I encourage consumers not to rush blindly into placing a credit freeze. Here's why: Cost. If you are not a victim of identity theft (a data breach victim does not automatically qualify) it may cost you to freeze and unfreeze your credit reports each time someone needs access. At $5 - $10 a pop that can add up. Equifax has extended free credit freezes for the time being but that isn't the case with all bureaus (at least not yet) and it's temporary.”

Then too, it can be a hassle. “Many people don't realize how often their credit information may be accessed outside of applying for credit. Get a new cell phone? Utility service? Satellite TV? A credit check is likely going to be involved. You don't always know which bureau companies are going to check. You have PINs or passwords to keep track of. All this can add up to a hassle factor. You may be fine with that, but do realize what you're getting into,” she says.

But what concerns her most though, is that it gives a false sense of security. “Yes, a freeze may prevent new credit accounts from being opened, though it's not foolproof, but it doesn't stop someone from phishing their way into your bank account, or protect you from medical or taxpayer id theft, for example. Your current accounts can still be compromised. This means you must remain vigilant and carefully monitor your accounts, even with a freeze in place.”

She has personal experience, “I was recently a victim of identity theft. I placed a fraud alert, not a freeze, on my credit reports. Would I ever place a freeze? Sure. But likely I would do that if I were the victim of serious identity theft, including multiple accounts opened in my name. For a data breach, I personally would not.” When you have a fraud alert, you’re notified if someone attempts to open a new account or access credit in your name.

Mark Tsipsi, CEO and founder of MOR Credit Advisors, thinks for most people, a credit freeze isn’t the best response to the Equifax breach. “I have a better chance of getting hit by a car after writing this email than having my identity stolen from the Equifax breach.  I am recommending ALL of our customers to obtain a credit monitoring service in order to be vigilant of any fraud. This way they can contact the financial institution immediately, close the account and remove the information from their report. This may take between 15-45 days”.

For who might a freeze make sense? “I would only suggest a security freeze for two types of consumers- A. Anyone in contract for a home purchase, already been pre-approved or B. Someone who has already experienced an identity theft.”

What to Do?

Though a credit freeze may not be necessary, there are plenty of other things you can do. Robert Harrow, a credit expert with ValuePenguin, a consumer research company, has a to-do list.

Check credit report

“Consumers are entitled to get free credit reports, check yours for any unauthorized accounts which might have been recently opened in your name. This can be a good first step in discovering whether you've become a victim of fraud,” says Harrow.

Report the Incident

If you spot any fraudulent accounts opened in your name or suspicious transactions, get in touch with the card issuer, file a police report, and report the breach to the three credit reporting agencies.

Consider ID theft services

Consumers who find themselves overwhelmed by the fraud in their name can look into card issuers' ID theft services to recover from the violation. “Citi, for example, helps affected customers by contacting TransUnion to review their credit reports and place an extended fraud alert on their credit files. The alert will transmit automatically to their credit files maintained at Experian and Equifax as well. Issuers also help by walking victims through the process of submitting a police report, and even monitoring affected customers' credit reports for any unusual activity on any other accounts until their case is closed,” says Harrow.

Sign up for an SSN scouring service

Says Harrow, “These services promise to thwart fraudsters before they can commit fraud with your card. Most notably, Discover’s Social Security number monitoring service, which recently launched, will track risky websites that are known to authorities to unlawfully sell or trade personal data. If your Social Security number shows up on one of these sites, Discover will alert you. Additionally, the card issuer will let you know if any new credit cards, mortgages, auto loans or other accounts appear on your credit report.”

Unabletofreeze   |     |   Comment #1
We tried to freeze a family member's 9/14 and all three failed because the system was overloaded..
Scamper   |     |   Comment #17
Place the initial 90 fraud alert with one of the three then initiate the freezes with each agency in a month after this panic is over.
bbug   |     |   Comment #2
I froze mine with all three agencies. No hassle and no cost to New Jersey residents.
scottj   |     |   Comment #3
I froze all mine about 10 years ago. Cheap money for the piece of mind it gives me. I will never borrow money and I don't want any hard pulls for opening a bank deposit account or something like a cell phone. I have only had to unfreeze one agency once to get a credit card I wanted, other than that most will find a way to open without pulling.
51hh   |     |   Comment #52
Good measure, Scott.
me1004   |     |   Comment #4
This Equafax breach is NOT the typical data breach. This is worse that any other before it, far worse. Gee, people are still talking of IF their data was involved. At 143 million, that means everyone in America lost their data, there is no IF about it -- that is pretty much all the adult population, the rest of the population numbers are children, undocumented immigrants, and some who have never been able to take care of themselves, maybe are institutionalilzed.

And this data was ALL your significant private info and in a neat package all in one place, something never before breached all at once, previous breaches have been only pieces of your data here and there.

That said, note that anything you do to protect yourself will have to be done for the rest of your life -- this data is now out there, and it will take the thieves a LONG time to go through all that -- they will still be doing first hits on people 20, 30 years from now when no one even remembers this breach.

Anything you do to block THEM also blocks YOU. This article is correct in noting that you will be surprised at how much this can interfere with YOU doing legitimate, routine things. You will have to plan all your decisions in advance, and un-do any protection measures you took in advance, and then after the fact set up the protection again.

Frankly, while everyone is talking of a credit freeze, you can largely do just as well with a free fraud alert on your credit records. But that will also interfere with you being able to do routine things like open a bank account, potential employers will check your credit and see that as an issue, for the rest of your life you won't be able to do any number of things on the spot because you found a great deal, you will have to pass on that until you can un-do the protections you set up, it will always have to be a plan in advance so you can first contact and take the fraud alert off and give enough time for that to take effect.

Everybody seems worried about TODAY. TODAY your chance of facing ID theft is 1 in 146 million. It is as more and more time passes that you will be in more and more danger, not very likely this week.

There is no good, easy solution to this. This is havoc, and for the rest of your life. No crushing, bankrupting fine on Equafax, no length of prison terms for the executives will fix this.
deplorable 1
deplorable 1   |     |   Comment #49
You are correct me1004 which is exactly why I would never do a credit freeze as it would stop me from doing my everyday banking and and deal hunting. The best thing you can do is just to keep a close eye on all of your accounts for anything that looks fishy and report it immediately. I'm not going worry about it as all your information has been out there since you opened up your first bank account or credit card. This is just the way it is in the modern world and there is no way around it unless you want to only use cash and live in a cave somewhere.
hank   |     |   Comment #5
After I was a victim of id theft, I did freeze my credit. As I wrote on another part of this site, it did cause me a problem when I wanted to take advantage of a cd rate. When I applied to the credit union , it got held up because of my credit freeze. By the time I got it unfrozen, they had changed the rate( a matter of days). So now I don't have frozen credit, I have an extended fraud alert at the credit bureaus . Hopefully that will suffice.
I only found out I was a victim of id theft after I found out a tax return was filed in my name, and then shortly after that, I found out a Comcast account was opened in my name in another city where I never lived. I found out about that one when it was turned over to collections.
me1004   |     |   Comment #14
I had a fraud alert on my credit reports some years back, after my wallet was stolen. That DOES interfere with opening CDs and bank accounts, I did run into trouble. They like to check your credit report, and that alert tells them to be very wary of you, so they simply say no.
relax   |     |   Comment #6
The article is spot on. As the author states, unless you've previously been the victim of ID theft it's best to not freeze. But, since the first tendency of the flock in cases like these is to panic there are going to be many, many people who have frozen their file who, as Tsipsi says, have a better chance of being hit by a car than having their info stolen. And I would add, if the reported number of files hacked is over 100 million, I would say you have a better chance of being struck by lightning than being a victim.
bbug   |     |   Comment #7
I'll relax now that I have freezes in place. The minimal effort (and no cost for NJ residents) make this a no brainer to me. It's simple to temporarily remove the freeze for a specified period or a specified lender when the need arises. It's permanent, unlike a fraud alert which requires periodic renewal. I think it's preferable to knowingly leaving myself open to ID theft, no matter how remote the possibility may seem.
hank   |     |   Comment #8
is it free in New Jersey to freeze and unfreeze any time you want and as much as you want?
bbug   |     |   Comment #10
I'm not sure. There may be a fee (Trans Union charges $5) to lift it and that fee may have to be paid to more than one of the agencies. If there are multiple fees, I think you could find out from the lender what credit agency it will be using. But you should be able to reinstate it for free. I guess I'll find out when I open my next credit card for the signup bonus, which will more than cover any fees. :-)

By the way, Equifax has lifted the fee for all states until November 21.
Kaight   |     |   Comment #19
OMG it is so GENEROUS of Equifax to help everyone out like that!! And all the way until November twenty-first, too!!

We need thirty years of help and they magnanimously offer two free months.

Equifax:   WABOA
Scamper   |     |   Comment #16
I don't have to outrun the bear, I just have to outrun you. Nah, you don't need to freeze your credit reports.
Volstagg   |     |   Comment #9
We should all expect to see an uptick in the number of fraudulent 1040's filed in April. Everyone may want to look at filling out IRS Form 14039 (Identity Theft Affidavit). I did this several years ago after being notified I was subject to the Anthum Breech. Each January, DW and I get a letter from the IRS with our filing PIN. No PIN and we can't E-File our returns (which means neither can anyone else).

Every person should decide for themselves if it makes sense to freeze your credit or not, in part based on the laws of your state.

I froze my credit 8 years ago at Equifax, Experian, Trans Union, Chex and Lexus-Nexus, long before I was subject to any known credit breeches. For me, the cost seemed small when compared to paying for an annual credit monitoring service (8+ years ago they didn't offer free comprehensive credit reporting services like they do now). Not long after I froze my credit, my state (North Carolina) passed a law making it free to freeze and thaw your credit if you do it online or via Telephone. There are several other states that make this free by law as well. It should be a federal law IMO. It costs credit reporting agencies almost nothing to let you do it from their web site.

Sure, what happened at Home Depot, Target, etc exposed my CC information. But in the last few years I've been notified that my SSN, DOB, address and lots of other personal information was released via the Athum, OPM and a few other breeches. There is no doubt that my information was out there on the "dark web" or whatever scare phrase the media wants to call it, long before the most recent situation at Equifax.

Does frozen credit cause me a problem, not really. I've been all the way through security clearance process with frozen credit. I just have to plan ahead. New employer wants to pull my credit, I coordinate with them on when I thaw it. I want to open a new credit card, I thaw my credit for 1 day, then apply. I want to open a new bank account, I also thaw Chex for 1 day. I've opened up a few dozen accounts since freezing my credit. Maybe 3 times I've had a problem, in 8 years. Mostly because I thaw my credit for 1 day and the bank didn't pull my credit during that window.

If you've been living in a cabin in the woods the last 25 years, maybe you're personal information is safe, otherwise it's out there somewhere you don't want it to be. After this latest breech it's not a question of if you're data is in the wild, but when it'll be used.

Unless you're opening dozens of new accounts a month, just freeze it and forget about it till you need it.
CuriousDave   |     |   Comment #35
Most of the fraudulent 1040's will be filed much sooner than April. Most will probably be filed as soon as the 2017 forms W-2 become available and as soon as the IRS electronic filing system is up and running - usually around mid-January, especially because the earlier the filing, the faster the refund. It has now become a matter of who gets out of the starting gate first, you or the scamster.
persimmon   |     |   Comment #11
The media has been asking EquiFax whether or not the data on their servers was encrypted.

If encrypted, this breach should represent a materially reduced risk, depending on the level.

Given that they refuse to answer this simple question, odds are that it was not encrypted.

Who needs the CPFB, anyhow?
DOA   |     |   Comment #12
If you asked identiy thieves if they wanted you to freeze your credit, they would probably say don't freeze it.
Scamper   |     |   Comment #15
I secured my credit reports (froze) years ago for $30 - a one time cost. This action prevents any lender from issuing credit on me. Multiple times over the years I have unlocked my reports to obtain a loan, a new credit card, a new cell phone service - each occurrence cost $30.

This process should be the default one. The fact that credit report agencies will allow 3rd parties to access your report without your explicit consent is absurd.
Smokeboat   |     |   Comment #18
Your privacy is very important to us....You bet. Please provide the short list of who hasn't been hacked. Thank You
HAD TO LMAO   |     |   Comment #20
rush limbaugh many years ago aggressively pushed a service which i won't name that was supposed to protect a consumer from wrongdoing by evil doers,,,,,,,,,,,,,,,wasn't it a requIrement of said service that one would submit ALL HIGHLY CONFIDENTIAL ID ACCOUNT DATA TO SAID SERVICE for this protection,,,,,,,,,lol lol lol lmfao, lmao, rofl, rolf,,,,,,,,,,limbaugh,,,,,,,seriously, really ,,,,RAHTHER!
Ron   |     |   Comment #21
You may want to tell Ms. Detweller to go back to banker 101, ifbyou do not need to have your credit report open then freeze the reports. If you want anoter report run make it part of the transaction in other word have the company you are dealing with pay for the opening and closing. You own your credit not the banks or reporting companies get your congress people to wake up.
Alerts   |     |   Comment #22
Nice information but you like everyone else is forgetting to tell the public there are five and maybe more credit reporting companies. The two back door ones no one mentions including government are Innovis and Microbilt(PRBC). You have to freeze all of the doors and be be on look out for others. Write your Congress people and get a law to eliminate the back doors (freeze one freezes them all including any future credit bureaus).
Smokeboat   |     |   Comment #24
Be sure to mention to your congress peeps the potholes, the drugs flowing thru our streets and your grandkids payment book.
Smokeboat   |     |   Comment #23
Credit (debt) is all about living a lifestyle you can't afford now, but you think you can afford later with added interest. Savers live a lifestyle based on past performance of financial (lifestyle) decisions.
Credit reports are all about your track record of debt repayment. CD's are savers near zero risk "loans" to banks and CU's that they can loan to the debtors. Banks and CU's take the risk, debtors get the lifestyle, the pizza and the payment book.


Credit reports are all about your history of debt repayment. Most savers could care less.
Att   |     |   Comment #27
Most people need a mortgage to purchase a home. The mortgage company will pull your credit report (Which you pay for). I only have mortgage debt at 3.25% and it is tax deductible. I pay cash for my cars but most people I know lease or finance. I will finance a car if I get 0% which I have done in the past. I also use charge cards so I get rewards or discounts. I pay my charge cards on time and have never paid a dime of interest. I live below my means but use credit to my advantage.
hank   |     |   Comment #34
Credit score does affect insurance rates, so even if you don't need any credit, you would likely end up paying more for your insurance if you have no credit rating.
Martin   |     |   Comment #29
Everything you do now is after the fact. Your "goods" belong to the criminals. Freezing is not the solution either, all, if not all government employees have access to your credit profile and they need not unfreeze anything to get to your files, bank and credit transactions, deposits, sources of funds, lawsuits and so on.
There are 3 sets of access to your account: a) Personal b) Business c) Government, what you are freezing is your own Personal profile and nothing else (it affect you only, you can not deny the financial institutions access nor to the Government your profile with all of the details included).
Only solution is for the credit companies to issue new profile with security pins accessible by you only and or approved by you only. I say, nobody cares about the consumer and no such feature will ever be given to the consumers. We are on our own perilous future, we are just a number to be exploited by anyone who already has a copy of our documents. Do not expect any help from anyone, fight for your own survivor.
YELLENSKI&COHNFINGER   |     |   Comment #30
111   |     |   Comment #31
I just invested in the ETF "FOIL", which holds aluminum futures - because clearly, the price of tinfoil hats is going up!
deplorable 1
deplorable 1   |     |   Comment #32
Freezing your credit is a really really bad idea and would be a total nightmare for me. I would never freeze my credit because I use credit cards for 99.9% of my purchases and have multiple 0% no fee balance transfers going all the time. You are not liable for any fraudulent use of your credit card anyway. There is no way to prevent identity theft 100% not a credit freeze or lifelock or credit monitoring service. What if you need to open a new bank account or credit card or auto loan you're locked out. It could also trigger fraud alerts on your credit cards and those could be shut down as well....................no thanks.
RJM   |     |   Comment #44
I haven't had a 0% no fee offer in at least 7-8 years. Used to do them all the time. Not in recent times.
deplorable 1
deplorable 1   |     |   Comment #46
That's because the Chase Slate card was just about the only game in town that had no balance transfer fee(other than some targeted offers) and interest rates were at rock bottom. Just recently a few other banks are now offering them again like BoA and Barclay's With interest rates starting to climb they have started to become profitable again. Most banks will charge a uncapped 3-5% bt fee which is a dealbreaker.
Nothing   |     |   Comment #48
From part of an article in the LA Times website...
"...Take the case of Oregon resident Julie Miller, who said she repeatedly reached out to Equifax from 2009 to 2011 to correct errors in her credit report. They included accounts she never opened, uncollected debts she never ran up and even a Social Security number that wasn’t hers.

"Atlanta-based Equifax apparently had merged Miller’s file with that of another woman with the same name and a similar Social Security number. Yet the company shrugged off Miller’s complaints.

"In 2013, a jury awarded Miller $180,000 in compensatory damages and a whopping $18.4 million in punitive damages, reflecting a sense among outraged jurors that Equifax just couldn’t be bothered to help a distressed consumer.

"A federal judge subsequently reduced the amount of punitive damages to $1.62 million, citing the precedent of earlier cases. Nevertheless, U.S. District Court Judge Anna J. Brown ruled that Equifax “engaged in reprehensible conduct.”

"Under Loudermilk’s bill, Miller’s compensation would have been limited to the $180,000 in compensatory damages, with no punitive damages possible...."
deplorable 1
deplorable 1   |     |   Comment #33
We all need to be compensated financially for this data breach and no a free credit report isn't going to cut it. They need to pay us some cash from a class action lawsuit on this one. You know they will try to weasel out of it by offering free credit monitoring for a year which costs them nothing. These credit reporting agencies basically just steal your information and sell it to businesses and back to you the consumer for a profit. I don't seem to recall ever being asked if they could have my information in the first place. They should have had better security with our information.
CuriousDave   |     |   Comment #36
Freezing one's credit may help prevent fraudsters from opening new accounts in your name, but they do nothing to stop the fraudsters from charging their purchases to your existing credit cards or accessing cash from your existing bank or money market accounts. Those accounts will need to be monitored regularly - say, weekly - for unauthorized use. Even then the fraudsters can use your existing accounts in very short periods of time. Even daily monitoring does not guarantee freedom from fraud. And don't expect fraud alerts on those accounts to protect you much either - by the time you get them a lot of damage might already have been done.
Att   |     |   Comment #38
You are not responsible for charges you do not make. When you get your statement review it carefully. If you find a fraudulent charge report it promptly.

My wife and I had our personal information stolen by a hospital employee. They tried to get credit from Dell who contacted me about the fraud. They had information on the person but my local PD would not take any action as the person lived in another area and they did not have resources to pursue a case. It was hard enough to get them to write a report. We had to freeze our accounts. We also used our AMEX card to charge the co pays and that person used that too. AMEX actually called us and shutdown the card. My wife's is a lifetime freeze. I just renewed mine.

The town I live in now has a fraud officer that persues cases of fraud.
Dan   |     |   Comment #37
Never gave the three credit agencys permission to collect and store my personal info. Should be a way to opt out. Congress needs to fix this mess
deplorable 1
deplorable 1   |     |   Comment #47
They also need to let the consumer have the control to change inaccurate information or false information on credit reports without having to go through all the red tape. The onus should be on THEM to prove that the information is correct not on US to prove that the information is wrong. All it takes is for someone posing as you to fraudulently take out a loan or open a credit card in your name and totally mess up your credit and then you have to prove they were a thief and it wasn't you. This could take forever to get fixed because these companies are not always on the ball and don't move very quickly to respond and in the meantime your credit is jacked up. It took me forever to get them to report a closed credit card as paid in full because the credit card company stopped reporting after I closed it. In fact I don't think they ever fixed it and it just eventually fell off the report.
Priscilla   |     |   Comment #39
I totally disagree with the premise of this article. A fraud alert? Those only last for 90 days! And then you have to place another one. The social numbers and other information of 143 million has been taken. This information will be out there the rest of our lifetimes.

A freeze is the only logical solution. It take a couple of minutes to lift a freeze using your password. Not a big deal at all.
ONE GOLDMAN PLACE   |     |   Comment #40
???   |     |   Comment #42
not to mention multiple posting identities ?
Sunnydays   |     |   Comment #41
I think it's sad that this article was even written, let alone published. It's not what I would expect from this site.
RJM   |     |   Comment #43
If they have 143 million other options, I suspect I'm well down the list despite having very good credit.

If it happens, I will resolve it as I did about 20 years ago when my identity was stolen. It was nowhere near the pain that people think it is. Of course, I wasn't buying a house at that exact time.

I hadn't heard of discovers new service. I will sign up for that.
DOA   |     |   Comment #50
For the most part, if you want to freeze your credit reporting information, freeze your accounts at the three agencies: Equifax, Experian, and Transunion. Now another profiteering credit agency comes out of the woodwork: Innovis. Just wondering why they have not been listed as another one to freeze?
kiwi   |     |   Comment #51
I think there are Choice Point, Clue Report, Choice Trust and a medical database too.
Kaight   |     |   Comment #57

Innovis is actually a legitimate credit reporting company. It is not a new company. I use them once each year to obtain a free copy of my credit report. It works like this:

At the beginning of each quarter I request a free credit report on a rotating basis, one each per year from each of the four credit reporting companies. This seems to work better for me than limiting myself to only three reports per year. And I have found the Innovis report to be equal in value to the other three.
If you have not already checked out the free Innovis report, give 'em a try.  You can request your free report (limit one per year) by first going to their website:

Dunmovin   |     |   Comment #58
I have a credit card related question...perhaps some assistance and the info/reply to this post may be helpful to all.
What I'm looking for is a credit card to use when I use rental cars. Specifically, I want the cc to be first in line for any collision/comprehensive expense (never had any in the past) to be covered. If one has any car loan/lease or newer vehicle, they probably have coll/comp with the car insurer (who covers the liability issue no matter what) and the cc companies I've seen would want to see (if there is an accident) your ins declaration page on coverage to see if you do have coll/comp, if it is there then the cc companies (from those I've seen and thus why this "long" inquiry/post) would deny that they are to cover the coll/comp loss.
I would think that most readers would rather have the cc company cover since that "should" not impact any claim count against your auto ins. Thus, the Q

Any cc companies out there that would not "care" as to whether or not you have coll/comp with car ins entity as to that coverage? Thanks!
RJM   |     |   Comment #59
I guess you could just say you do not have your own insurance or a car. Then they should pay I guess.

Its been 20+ years since I rented a car but I only had liability only on my car at the time and I verified that I think Visa would provide rental insurance before I rented.

Its not usually the bank, its Visa. Or Discover or whatever. I think most of them provide this now.

Of course, I never had a wreck and I did decline the extra the rental car company tried to add.
Dunmovin   |     |   Comment #60
Thanks. Travel a lot. Trying to minimize exposure to using my ins. Like the mileage in using a rental car is not used in ratings, want to have potential of coll/comp have primary liability with a card company. Anyone else?
#56 - This comment has been removed for violating our comment policy.

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