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Free Credit Protection: What Consumerism Doesn’t Want You to Know

Have you ever listened to the news reports of another data breach and you shifted uncomfortably on your seat wondering what you would do if your identity were stolen?

According to LifeLock, travelers are 66% more likely to be victims of identity theft.

I’m a full-time traveler and I don’t worry about identity theft. I certainly still take precautions with my personal data but I don’t worry because my credit is frozen. I’m writing this today because I have some exciting news about freezing your credit along with another alternative that just might save you some hassle.

What is a Credit Freeze

A credit freeze, also known as a security freeze, is basically you telling the three credit bureaus – Equifax, Experian, and TransUnion – that they are not allowed to share your credit data with anyone. It is your information. You can determine who sees it.

In order for a loan or any line of credit to be obtained, lenders request this report from the bureaus. They do this to see if you generally pay your bills and if they are at risk of losing any money that they lend you.

Credit freeze is not a new thing. The first credit freeze law to be passed was in California back in 2003, and by 2007 all three credit bureaus offered credit freeze to all 50 states.

The Pros and Cons of Freezing Your Credit

PRO: No lender will have access to your credit data. If a lender can not obtain this report then they will not grant a loan or line of credit. This is excellent news if someone has your personal information and is trying to take out a loan in your name.

CON: The downside is that you can’t get a new credit card or loan either unless you unfreeze your credit. In my opinion, I’m perfectly fine with a little bit of hassle once in a great while to have peace of mind about my credit.  When I hear of data breaches I’m always happy to know that my credit is frozen.

Our Experience

My husband and I froze our credit over a decade ago. We only had to get it unfrozen twice during that time. Once to refinance our first home. The second time was to obtain a mortgage on our a home in North Carolina when we moved there.

My husband was able to go online and unfreeze his credit on all three bureaus within a few minutes. I was able to unfreeze two of mine online quickly, but the third ran into a snag. The third credit bureau required me to call them and then I had to wait for snail mail information from them in order to verify who I was.

I still wouldn’t call it a major hassle I just had to wait. I personally feel that it is completely worth it for the security it brings us the rest of the year.

Is Freezing Credit Right for You?

Only you can answer this question but there are a few things to consider. If you are in the midst of moving remember that landlords also run credit reports before they will approve you as a tenant. Insurance companies may also require a credit report before granting you a new policy.

If you are opening new credit cards often it could be a hassle. So evaluate the season you are at in your life right now to see if it is right for you. Also, think about the frequency with which you open credit lines. Too many inquiries on your credit report could negatively impact your credit score.

Why Isn’t This Advertised More?

Well, think about it. Who would pay for that advertisement? Generally, advertisers are companies selling you something. If you freeze your credit you might not take out as many loans or credit cards. They want you to keep buying more and more things with money you don’t have. Consumerism doesn’t want you to freeze your credit.

I’m writing this article because most of the people I talked to don’t know much about freezing credit or have the right information. Some were unaware of it, while others had a fear of it impacting their credit rating or making it too difficult to unfreeze their credit.

Let’s talk about what a credit freeze can and can’t do, and also some misconceptions about it that we need to discredit (smirk).

Credit Freeze Does Not Impact Your Credit Score

According to the FTC, a credit freeze does not impact your credit score. The three bureaus are still collecting all your data.  You will still have revolving credit on your current cards (and hopefully still paying all your bills on time). They just aren’t giving this data to anyone else.

You can also still pull a free annual credit report from each bureau even when your credit is frozen. Regularly checking your credit report is a good thing to do whether your credit is frozen or not.

Also related: See How to protect your credit score during COVID or other times of crisis

What it Does Not Protect

This does not prevent fraud on any currently open line of credit, but there are other protections in place there. I have had my credit card compromised more times than I can count. Usually, the credit card company detects it before I do and removes the fraudulent charge.

I have never had to pay a charge that was not mine on my credit cards. Sometimes it’s a hassle to wait for the new card and then redirect any bills that were automatically coming from it, but that is the cost of fraud protection.

A debit card, on the other hand, does not have as much protection. For that reason, I never use my debit card for purchases, ever.  If someone gains access to your bank account they can clean it out. I’m also very careful about using any suspicious ATMs (see the last part of our article about contraband in Bolivia to read about Debit Card Safety here).

Lastly, I’ve lowered the daily ATM withdrawal limit on my debit card. This reduces the potential loss during a flash kidnapping. A flash kidnapping is when a thief forces you to go to an ATM and demand that you withdraw cash. It’s common in some places here in South America.


Jumping in Utah

Freezing/Unfreezing Your Credit is now FREE

I’m writing this article this week because something great has happened. It has been legislated that freezing and unfreezing your credit report with all three bureaus will now be free to everyone in the USA.

As of September 21st, anyone in all 50 states can freeze and unfreeze their credit for FREE. In some states, this was already free, but in others, you would be charged between $3 to $10 to freeze or unfreeze a credit report. With there being three bureaus, this cost could add up. But not anymore.

How to Freeze Your Credit

You can do it online at each of the bureaus’ websites Equifax, Experian, and TransUnion (click the links below). Or you can call them at the following toll-free numbers.

  • Equifax — 1-800-349-9960
  • Experian — 1‑888‑397‑3742
  • TransUnion — 1-888-909-8872

To be effective you do need to freeze all three bureaus as some lenders only require a report from one bureau to approve someone for a line of credit.

How to Unfreeze Your Credit

If you want to open a new line of credit you will need to unfreeze your credit first. You can unfreeze it permanently, for a specified length of time, or for a specific vendor.

Each credit bureau will give you a PIN that you must keep when you freeze your credit. You will need that PIN to unfreeze your credit.  To unfreeze your credit you basically go through a similar process above.

It can be a hassle but in my opinion, it is totally worth it.

But Wait, There is Another Option!

Credit Lock

A credit freeze and a credit lock are similar but not the same. Both a freeze and a lock will prevent organizations from obtaining your credit report and granting anyone a line of credit. The difference is in the process of how you unlock/unfreeze your report.  With a lock, you can simply unlock your credit with a swipe on your phone or a click from a PC.

With a lock, you may have slightly more vulnerability if your PC is hacked or your phone is stolen. This is fairly new and is just my opinion that there is a small added risk with a lock because of the ease of a simple click. Please, comment below if you have experience with the lock and its security measures.

Added Benefits of a Lock

A lock also comes with immediate security alerts whenever anyone is trying to access your credit reports.

Currently, all three bureaus offer Locks and Alerts, but only TransUnion and Equifax are free.

If you lock your credit with TransUnion you will also get unlimited access to your credit report.  Definitely check out this page about how the TransUnion lock works.  Sounds like a great alternative to the hassle of a freeze.

As of this writing, TransUnion is the only credit bureau that offers free identity and credit protection.

My personal opinion and suggestion:  Freeze your credit with Experian and Equifax, but lock your credit with TransUnion.

The extra benefits with TransUnion are great. Since some vendors only require an unlock with one bureau it may also save you quite a bit of hassle too. I could be easily swayed to lock with Equifax as well, but not with Experian – I like free 🙂

Expats at Risk

We have been out of the USA for almost two years now. It will be well over two years by the time we return next year. I often wonder how shocked we will be when we come back to visit all our friends and family. We have primarily shopped in open markets paying each farmer directly with cash. Will we look dumb trying to figure out some new, fandangled, automated checkout when we return? Will we stand like tourists gazing up and down old streets that are no longer familiar?

I hope we are not too far out of it. With Facebook and the online community, I feel like we keep up not too badly. But some things change without being seen. A friend of ours recently told us about a fellow expat. He had his identity stolen while he was out of the country. They had no idea until they returned a few years later.  At least that is one nightmare I don’t worry about – because we have our credit frozen.

We would love to hear from you. What has been your experience with a credit freeze or unfreeze? Have any of you locked your credit? Do you have any other questions about it?

Please note that we are currently in the jungle off the grid. We scheduled this post ahead of time so we will respond to your questions when we return.

Other Helpful links

You may also find the following links helpful if you are a victim of identity theft or just want to monitor your reports (which I highly encourage you to do).

While you are looking for your next opportunity – make sure the one you already have is safe!

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