Recent data breaches have caused all of us to become more concerned about safeguarding our personal information. Protecting your financial information can help reduce your risk of identity theft, and there are some effective steps you can take: monitor your credit report regularly, use ID protection on your accounts, and place a freeze on your credit report.
What is a credit freeze?
A credit freeze will “freeze,” or restrict access to your credit report, which makes it more difficult for criminals to open a new account in your name. Since creditors generally obtain a credit report before approving a new loan or credit card, a freeze on your report will keep them from seeing it. If creditors can’t see your file, they probably won’t approve the credit application.
Will a freeze affect my credit score?
A credit freeze does not affect your credit score, and you can still obtain a free copy of your credit report once a year.
What’s the difference between a credit freeze and a fraud alert?
A credit freeze is not the same thing as a fraud alert. A credit freeze locks down your credit so no one can see it, whereas a fraud alert allows creditors to get a copy of your credit report as long as they take steps to verify your identity. For example, if you provide a telephone number, the financial institution must call you to verify whether you are the person making the credit request.
Three types of fraud alerts are available:
- Initial Fraud Alert - If you're concerned about identity theft, but haven't yet become a victim, this fraud alert will protect your credit from unverified access for at least 90 days. You may want to place a fraud alert on your file if your wallet, Social Security card, or other personal, financial or account information are lost or stolen.
- Extended Fraud Alert - For victims of identity theft, an extended fraud alert will protect your credit for seven years.
- Active Duty Military Alert - For those in the military who want to protect their credit while deployed, this fraud alert lasts for one year.
Fraud alerts may be effective at stopping someone from opening new credit accounts in your name, but they may not prevent the misuse of your existing accounts. You still need to monitor all bank, credit card and insurance statements for fraudulent transactions.
To place a fraud alert on your credit reports, contact one of the nationwide credit reporting companies. A fraud alert is free. The company you call must tell the other credit reporting companies; they, in turn, will place an alert on their versions of your report.
How do I put a freeze on my credit reports?
You can put a freeze on your credit report by contacting each of the nationwide credit reporting bureaus, either on their web sites or by phone:
After receiving your freeze request, the credit bureau will send a PIN or password that you will be required to use if you ever want to lift the credit freeze, so keep this information in a safe place.
Costs to freeze your credit may vary, and could be anywhere from $5 to $30. Note: In response to their recently-disclosed data breach, Equifax will freeze your credit report at no cost through January 31, 2018.
Can I still get a loan if I have a freeze on my credit report?
Credit freezes are an effective way to keep criminals from taking out loans in your name, but they can also be inconvenient in some instances. If you're legitimately trying to obtain a new loan, applying for a new job, renting an apartment or purchasing an insurance policy, you’ll have to plan ahead and remember to lift the freeze prior to doing any of these things.
An important distinction to remember is that credit freezes do not affect credit that you’ve already established, for example, you can still draw on a previously-approved line of credit.
How do I un-freeze my credit?
In a few states, credit freezes expire after seven years. In the vast majority of states, a freeze remains in place until you ask the credit reporting company to temporarily lift it or remove it altogether. A credit reporting company must lift a freeze no later than three business days after getting your request. The cost to lift a freeze varies by state.
Should I freeze my credit report?
Freezing your credit report may seem excessive, but in this era of data breaches, many experts agree that a freeze is a precautionary step we should all consider taking. You’ll have to do some advance planning and lift the freeze before you apply for a loan, but there’s no doubt that it’s one of the most important tools you can use to protect your credit. To learn more about credit freezes, visit the Federal Trade Commission Consumer Information web site.
At Hancock and Whitney Bank, we’re committed to ensuring that your personal financial information is safe. That’s why we offer free credit monitoring through ID Protect for clients with Connect, Priority and Private Banking checking accounts. Visit a branch today and talk to a banker about ID Protect and other ways to protect your financial information.
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