Should You Freeze Your Credit Report?

Perhaps. It depends upon your immediate plans. If you’re getting ready to buy a house or a car, or if you need another credit card, then no, you definitely should not. But if you have no impending need to apply for credit, and you worry about identity theft, then it could be a good plan for you.

Many older consumers are good candidates for this. They’re at an age where they aren’t likely to want a new house or a new car – at least not any time soon. Generally they have several credit cards, many that they aren’t using, which gives them excellent credit. And, sad as it is, elders are often the target for identity fraud.

But first, what does “freezing your credit report” mean? Simply stated, it means that no one, not even you, can access your credit report.

This move helps prevent identity theft because thieves trying to use your credit will run up against a brick wall. When a would-be creditor tries to run a check, they’ll be denied. And when a creditor can’t find out if you’re a smart money manager or not, they’ll deny the credit.

The down side is that you’ll have to pay $10 to each of the three credit reporting agencies: Equifax, Experian, and Trans Union. If you have a spouse, you’ll also have to pay $10 each for your spouse. You’ll also have to fill out paperwork.

However, you can get a “free freeze” if you’ve already become a victim of identity theft. You’ll have to send a copy of the police report in lieu of money.

Because the credit bureaus fought for 4 years to prevent Congress from passing a bill allowing individuals to freeze their reports, they aren’t making it easy for you. You’ll have to mail certified letters, present utility bills to prove you are who you are and you live where you live, and give other personal information.

Later, when you want to purchase a house or a car on credit, you’ll have to go through a reverse process to “thaw” your reports. You’ll pay the $10 per person per credit bureau over again. That’s the second “down side” to freezing your credit report.

Only you can decide if this is the right move for you. But anyone who has gone through the hassle of putting their lives back together after a brush with identity theft would probably tell you that paying those “freeze and thaw” fees is well worth it.

One Response to “Should You Freeze Your Credit Report?”

  1. Jeremy Duffy says:

    Actually you can access your credit report just fine. So can any creditors that have an existing relationship with you.

    But it will prevent some jerk in South America or wherever from finding your data online and opening credit in your name.

    And I don’t think it matters if you’re about to buy something. Just freeze your credit after. Everyone should freeze their credit and then push for state laws to make the fees free or very cheap in the future.

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