Identity theft could be hugely damaging to your credit — especially if, like many individuals, you simply catch it once you have got been denied a latest bank card or loan.
When a scammer steals your identity, they may give you the option to open latest bank cards, take out loans and even access medical care under your name, leaving you with a history of unpaid bills.
Nonetheless, if you have got been a victim of identity theft, there are easy, effective steps you may take to guard your credit from this point onward, including a credit freeze. Read on to seek out out more about what a credit freeze is, its benefits and drawbacks, and other alternatives to guard your credit history.
What’s a credit freeze?
A credit freeze, also referred to as a security freeze, is a protection you may request from the main credit bureaus that limits access to your credit report. When your credit is frozen, most creditors cannot view your report unless you lift the freeze, which might prevent latest credit accounts from being opened under your name.
It’s necessary to notice that other third parties — reminiscent of employment screening agencies and existing creditors — can still view your report. (Although within the case of employment screening, they’ll only achieve this together with your signed authorization.)
Why freeze your credit after identity theft?
Freezing your credit is just one in every of several necessary steps you’ll have to take should you discover your personal information has been compromised or your identity has been stolen.
This particular step is amazingly necessary, nonetheless. If a scammer tries to open a latest account under your name, the lender won’t give you the option to examine your credit file and can deny their application. Stopping them of their tracks will prevent further damage to your credit history and credit rating.
Do note that whenever you do determine to use for a latest line of credit — say a bank card or a loan — you’ll should manually unfreeze your credit. Nonetheless, credit reporting agencies make this process very easy, as you’ll see below.
Easy methods to freeze (and unfreeze) your credit
Because ID theft has grow to be so common, the main credit bureaus have made the strategy of freezing your credit quick and easy. The truth is, you may freeze (or unfreeze) your credit in minutes directly on the bureaus’ web sites.
You’ll have to create an account with each and supply personally identifying information reminiscent of your social security number. Once you have got an account, you may freeze and unfreeze your credit (either indefinitely or for specific periods of time) on that very same page.
It’s best to freeze your credit with all three credit reporting agencies as each lender uses different bureaus, sometimes one or two. Say you freeze your credit with TransUnion, but not Experian or Equifax – if that’s the case, a scammer could open an account under your name in the event that they occur to use to a lender that verifies credit using the opposite two bureaus.
Alternatives to a credit freeze
Should you don’t need to freeze your credit, you might request a fraud alert as an alternative. (Should you’re within the military and are about to be deployed, then it is best to consider an lively duty alert.)
A fraud alert lets creditors know you’ve been a victim of identity theft. With this alert, any lender that receives a credit application using your information is required to contact you to verify it was really you who made the request.
Unlike a credit freeze, a fraud alert doesn’t have to be removed should you were to ask for a latest bank card or line of credit. Nonetheless, it is best to be mindful that should you ask for a latest credit line or card, you is perhaps required to supply additional evidence of your identity.
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