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Top 3 Considerations When Choosing To Freeze Your Credit

Tuesday, Dec 11, 18

Freezing your credit is an option provided by the 3 major credit reporting agencies, Equifax, Experian, and Trans Union. When you freeze your credit report you basically lock any future creditors from accessing your credit. When applying for credit in the future, you must unfreeze (thaw) your credit report so your new potential lenders can access your credit.

Top 3 things to consider before freezing your credit:

  1. FEES– The credit reporting agencies generally charge a fee to freeze and thaw your credit. The fees vary by state but can add up. In Pennsylvania, each credit reporting agency charges $10 plus tax to freeze your credit (fee is waived for ID Theft victims and people 65 or older). In addition to the fee to freeze your credit, you are subject to additional $10 charge (fee is waived only for ID Theft victims) each time you unfreeze your credit or obtain a specific party lift. These fees may not sound too high but can add up. Keep in mind, these are charged by EACH credit reporting agency EVERY time you want to apply for credit. I will provide an example below on how the extra hassle can cost you more money than what the credit reporting agencies charge.
  2. HASSLE– We live in a world where everything seems to happen in an instant. Many consumers find the process of unfreezing their credit a hassle. Without taking all the steps to unfreeze or get a specific party access lift, NOONE can access their credit. Some consumers find the extra hassle can be costly. I spoke to a mortgage client recently who complained he was unable to lock in interest for days while trying to get his lender access to his credit; by the time he unfroze his credit, the interest rate increased costing him thousands in additional interest charges.
  3. ID Theft Protection– Some consumer advocates think freezing a credit report in the safest prevention of ID Theft. Sadly, most ID Theft occurs within the family. If a family member has access to all your personal information (Social Security Number, date of birth….) they may also have access to unfreezing your credit report. According to The Debt Doctors consumer bankruptcy and credit attorney Matt Herron, “data furnishers and the credit reporting agencies are subject to the requirements of the Fair Credit Reporting Act. The Fair Credit Reporting Act requires data furnishers and the credit reporting agencies to have systems in place to remove accounts from consumers credit reports related to ID Theft.” Consumers have rights to correct inaccurate credit reporting.

Consider the benefits of freezing your credit versus the cost and potential hassles. Only you can determine if the potential benefit is right for you. I personally do not freeze my credit reports.

About the Author

Credit Reporting / Scoring Expert, Chris McConville is the President of Credit Education at CureMyScore.com and founder of myexpertcreditwitness.com where he works as an Expert Credit Witness in both Federal and State Court. With working in the credit and mortgage fields since 1991, he’s dedicated to sharing his knowledge to educate consumers.

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