Why You Should Consider Freezing Your Credit Reports

Associated Press/Joseph Pisani | 1/7/2016, 3:17 p.m.
Freeze your credit reports before you get burned. That's the message from security experts, consumer advocates and some state Attorneys ...

Freeze your credit reports before you get burned.

That's the message from security experts, consumer advocates and some state Attorneys General. They say more people should consider a credit freeze as a way to block identity thieves from opening new credit cards and other accounts in your name. They recommend a freeze even if your identity hasn't been stolen.

"It's much better to shut the door before it even takes place," says Mike Litt, a consumer program advocate at the nonprofit U.S. Public Interest Research Group. "You can save yourself so much time and headache."

There are some downsides to a credit freeze to consider. It also blocks you from opening new lines of credit, so if you plan to take out a mortgage or apply for a new credit card you'll need to remember to unfreeze it each time. And residents of some states have to pay a fee for a freeze.

Here's more on how credit freezes work:

Q: When should I freeze my credit report?

A: It's a must if an account has been opened in your name or if you've been notified that your Social Security number was taken in a data breach. Even if identity theft hasn't struck, you still should seriously consider it, since data breaches have become so common. So far in 2015, there have been 766 data breaches at banks, government agencies and big companies, exposing more than 178 million records, according to the nonprofit Identity Theft Resource Center. A breach of government records, for example, exposed Social Security numbers of about 26 million federal employees and their spouses.

Q: How do I freeze my credit report?

A: Contact each of the three credit reporting agencies — Equifax, Experian and TransUnion. You'll need to freeze your credit report at all three because some creditors only use one. Contact Equifax at www.freeze.equifax.com or 800-349-9960, Experian at experian.com/freeze/center.html or 888-397-3742 and TransUnion at transunion.com/securityfreeze or 888-909-8872. They'll ask you for your Social Security number, name, address and other details.

Q: How much does a credit freeze cost?

A: It depends on the state laws where you live. Fees are typically between $3 and $10 to freeze each credit report, and you may pay another fee to unfreeze. Freezes are free at a few states, including Indiana and Maine. Fees may also be slightly different at each credit agency. Equifax has a list of fees and rules for each state at https://help.equifax.com/app/answers/detail/a_id/75/~/security-freeze-fees-and-requirements .

Q: Will the freeze hurt my credit score?

A: No.

Q: Is this different than credit monitoring?

A: Yes. Credit monitoring services, which you have to pay a monthly fee for, alerts you if a new account is opened or other suspicious activity takes place. A credit freeze is the only way to stop criminals from opening new accounts in your name. Some experts don't recommend credit monitoring because it's expensive, as much as $20 a month. Instead, you can monitor your credit report on your own. You're entitled to get a free copy of your credit report from each of the three agencies once a year at www.annualcreditreport.com .