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Should I place a freeze on my credit file?

Credit Freeze Visualization With a Credit Card Cardoza Law CorporationIt feels like massive data breaches are happening all the time. When it happens, you probably hear newscasters advising people who may be affected to place a freeze on their credit files. What does this mean and should you do it? We explain here.

What Does a Credit Freeze Do?

The first thing to understand is that freezing your credit is not a guarantee that your identity will be protected. When you place a freeze on your credit report, the credit reporting agency (CRA) will not release your credit information to a third party without your permission. Because creditors check credit reports before issuing a loan or credit card, anyone trying to do so in your name will be stopped. You will have to place the freeze with each of the three CRAs—Equifax, Experian, and TransUnion—separately. After that, you can expect the following:

  • The CRAs will lock down your reports so that no new creditor or other party can get access to them without getting a PIN from you.
  • Your current creditors will continue to have access.
  • If you want to open a new line of credit, apply for a mortgage or car loan, or need to have a background check conducted, you will have to lift the freeze for the parties who need access to your report.
  • Credit freezes are free and will stay in place until you remove them.

Placing a credit freeze may give you some peace of mind if your identity has been stolen—or if your personal data, including your Social Security number, have been compromised—but it can’t stop a thief altogether and it may be more trouble than it’s worth.

The Downside of a Credit Freeze

A credit freeze will create a lot of work for you, so you want to make sure it’s the right action to take if your personal information has been stolen. Every time someone needs to access your credit report—including you—a PIN will have to be provided. If you are in the process of buying a car, moving, applying to school, or job hunting, you will be handing out a lot of PINs. A credit freeze will not prevent someone from using your credit card number to make purchases, which is the most widespread type of theft. Unless someone got ahold of your Social Security number and has filed a tax return or is opening new accounts in your name, a credit freeze may not be the right move to make.

Credit Report Problems Due to Identity Theft? Call Me!

Credit freeze or not, if you have incorrect and damaging information on your credit reports caused by identity theft and the CRAs are not cooperating in helping you clean up the report, contact me. They are breaking the law and may owe you damages, as well as being required to fix your reports and your credit score. Not sure what to do after being the victim of identity theft? Contact me online or call my office directly at 855.982.2400. I’ll help you understand your options.

 

Michael F. Cardoza, Esq.
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U.S. Marine & Consumer Financial Protection Attorney dedicated to fighting debt and credit bureau harassment.