Should I Freeze My Credit Reports?

After the recent Equifax Breach with over 145 million American identities at risk, questions and concerns of security have quickly risen to the surface. The media has been covering this topic profoundly while many U.S. lawmakers take a closer look at how we can better protect American consumers against data breaches. The frequency of personal invasions will only continue to increase with technology. Exploring alternative ways to protect the average American consumer against these occurrences ultimately been issued a FASTPASS. Now to answer the larger question; what should consumers actually be doing to protect themselves?

One of the most common pieces of advice floating around in the media right now, is for consumers to freeze their credit reports with the 3 major credit bureaus (Equifax, Experian and TransUnion). This is a service that Equifax is providing for free right now in response to the catastrophic breach, while other reporting agencies will typically charge a small monthly fee for. When a credit report is frozen, it disables anyone from being able to apply for credit under the social security number that is associated with the frozen report. While this is a great way to deter identity thefts from using your social security number, it also makes it difficult for you to apply for credit as well.

Once you have frozen your credit reports with the credit bureaus, in order to apply for credit again, you will have to do some leg work in order to unfreeze your reports. This has been portrayed as a rather simple process where you simply call the credit bureaus and have them unfreeze your report, however there are several steps outside of a simple phone call that are required in order to unfreeze your reports; understandably so, they need to be able to prove that the individual unfreezing the report is in fact the same individual associated with the social security number and the credit file. Nevertheless, this process can potentially be a lengthy one, sometimes taking months to unfreeze your report.

If you don’t have any plans for financing in the near future, then you’re probably okay. However, if you are in the middle of trying to qualify for a home, looking to purchase a new car or applying for any type of credit that requires your credit being pulled, freezing your credit reports may not be your best option while you’re in the middle of that process or preparing to embark.

Sometimes, life has a way of throwing us curve balls as well. You may not be planning or considering the purchase of a new car, but you don’t know when your current vehicle may be involved in an accident or hits the wall. If life throws you a curve ball and you need a solution quickly, having your credit reports frozen will not necessarily be favorable. A better solution might be to sign up for a credit monitoring service that sends you credit monitoring alerts to your email, your updated credit reports and scores each month, fraud alerts, ID theft insurance, and other benefits that will allow you to always know what is going on with your credit and who is using it. Services like these typically charge a small monthly fee, which may be worth the peace of mind that comes with knowing your credit is okay and that if anything does happen, you’re insured.