What’s credit freezing all about? And how can consumers like you benefit from this privilege? The answers to these questions and more will be tackled in the paragraphs below.
What’s Involved in Freezing One’s Credit Information?
A credit freeze is a request you will make with the three major credit bureaus – Equifax, Experian and TransUnion – to stop receiving inquiries on your annual credit report. Once you do this; lenders, insurance firms, prospective employers, and other individuals will not be able to pull your credit files. In fact, even you cannot request for the latest copies of your credit report, unless you will instruct the employees of the credit reporting agencies to unfreeze or thaw your credit information.
Unlike credit fraud alerts, which often last for only 90 days; a request for credit freeze can last for a very long time. Truth is your annual credit report will be in frozen state until you call up the major credit bureaus to lift the freeze. After doing so, you can once again apply for credit card accounts and even for personal loans.
Just remember that not all states allow consumers to freeze their credit details. Based on recent studies, only 38 of the 50 US states give consumers access to this special privilege.
Suppose you’re planning to sign up for a line of credit and you requested the credit bureaus to thaw your credit files. How long will such process take? Well, the answer depends on which state you currently live in as well as on the credit reporting agency that will be issuing the documents you have requested. But, in general, it might take just several minutes or up to seven days to change the status of your credit file from “frozen” to completely thawed.
Now, why do consumers freeze their credit information? There are several reasons for doing so.
Why Freeze Your Credit Report
First and foremost, it helps safeguard consumers from credit fraud and identity theft. After all, by going through the process of freezing and unfreezing your credit files, you can have a greater assurance of preventing unauthorized parties from gaining access to your personal, contact and credit information.
Some consumers also decide to freeze their accounts to stop receiving offers for pre-approved credit cards. This is especially true for individuals who find it difficult to curb their spending habits. After all, such step can help them fight the urge to apply for new lines of credit, which can possibly inflict further damage to their personal finances and even to their credit history.
Now, how can consumers, like you, request for this special privilege? Well, you need to write and send a letter requesting the credit reporting agencies to freeze your credit information. In your letter, you should attach at least two proofs of residency. You can obtain copies of your monthly billing statements, as well as a copy of your driver’s license and enclose these documents to your letter.
You will also be required to pay for your request. The cost of freezing, as well as thawing, your credit information may range from $10 to $12 per credit reporting agency.