Credit Freeze: What it Means and How it Can Help You


It seems like there’s always some headline in the news of another company being hacked. Whether it’s a bank, a credit reporting agency, or an online storefront, these hacks can have serious consequences. If an institution with your financial information is hacked, you could be at risk of identity theft. This is a serious problem. Your credit score, your finances, and your good name could all be on the line if your identity is stolen. This is particularly damaging if you’re trying to repair your credit. Contesting charges and correcting fraud is a huge task that often takes months, if not longer. Meanwhile, your funds are tied up while the bank investigates. One way you can prevent yourself from being targeted easily by identity thieves is having your credit frozen.

What is a Credit Freeze?

A credit freeze is a process you can go through with any of the three credit reporting agencies. By freezing your credit, you make it so agencies that try to run a credit report on you come back with nothing. In essence, it means your credit can’t be accessed while frozen. When you want to thaw your credit, you use a personal identification number you set up prior to freezing. This essentially functions as two-factor authentication for your credit. What you can do is leave your credit frozen at all three credit reporting agencies. While frozen, even if someone accesses your financial information, they won’t be able to take out loans or open lines of credit in your name. This is pivotal, as it essentially closes your identity off to would-be fraudsters. Assuming you keep your PIN secret, it becomes all but impossible to use your credit with even robust information about you. Your birthday, social security number and other identifying info can get lifted during a hack, but, without your PIN, identity thieves can’t use that info for nefarious means.

Keep This in Mind

Remember, however, that a credit freeze isn’t some unbreakable ward against fraud. Other forms of fraud can still target you. If your credit card information is stolen, for instance, charges can still be placed in your name. Likewise, more complex forms of theft, such as stealing your banking information, could still target you. Be careful with your personal info online. Don’t give your information to any sites you don’t trust. Keep your identifying information a close secret. Try to stay smart, and use a credit freeze as another layer of security between yourself and thieves!