Determining the Optimal Time to Freeze Your Credit

Freezing your credit is one of the most effective safeguards against the growing menace of identity theft. Nonetheless, it remains a lesser-known tactic, with many ignorant of its availability, let alone the best times to use it. Essentially, a credit freeze prevents anyone, even yourself, from opening new credit under your name.

This means that fraudsters cannot use your identity to open credit cards, obtain cell phone service, or secure loans, even if they have complex personal or financial information or counterfeit IDs. Your frozen credit remains completely impenetrable.

Sounds appealing, right? So, why aren’t people freezing their credit? However, there are some drawbacks. To initiate a credit freeze, contact each of the three credit agencies, submit a request to freeze your credit, pay a small charge, and complete the required online paperwork. Furthermore, the freeze lasts indefinitely, requiring a thaw everytime you need access to your credit. While this process is usually completed quickly online or over the phone, it may take a few business days if sent by mail.

A credit freeze may not be appropriate for all situations because it can influence non-credit decisions such as insurance purchases, security clearances, and job applications. After all, explaining to a potential employer why HR was unable to check your credit may not be an ideal situation. However, there are four common instances in which freezing your credit may be smart.

1. After a Death

   The estate executor initiates a deceased alert, which freezes the deceased’s credit, preventing future identity theft. While the Social Security Administration notifies credit bureaus of a death, delays are possible, especially during times of high demand, like as the pandemic. Executors should physically contact all three credit bureaus to ensure the deceased’s credit is inaccessible to hostile actors.

2. After Becoming a Victim of Identity Theft

   This is the primary cause for credit freezes. While it is analogous to closing the stable door after the horse has bolted, it provides security against future theft attempts. Victims of identity theft have the right to freeze and thaw their credit at no cost, recognizing that thieves have personal information about them.

3. If You Suspect Data Breach

   With frequent instances of personal data breaches from numerous websites, a security credit freeze may be prudent when getting alerts of compromised information. Depending on how sensitive the stolen data is, you might consider using extra fraud alert services in addition to freezing your credit.

4. Credit Freeze for Minors

   Children are frequently targets of identity theft, which is surprising given their limited access to credit reports. Freezing a child’s credit has few negatives as compared to adults and can help prevent undiscovered identity theft until they need credit as adults.

Thawing the Credit Freeze

When you need to defrost your credit, whether for mortgage refinancing or job background checks, specify the credit agency being used to make the process easier. Because each agency’s credit must be processed separately, understanding which one is being used might save time and work.

In conclusion

While a credit freeze is not a cure-all for identity theft, it does add another layer of protection against future financial data breaches. Although it requires initial setup and monitoring, it efficiently prevents illegal credit usage. Many people perceive credit freezes as a temporary tool to improve account security, making them a worthy attempt for individuals seeking peace of mind.

Ethan Johnson

Editor-in-Chief • Industry Trends Writer

Ethan analyzes market shifts and predicts future developments in different industries to keep his audience well informed and ready.