Credit freeze, also known as security freeze, is a practice of credit bureaus or reporting agencies wherein they do not share the credit history or report of a citizen with any lender, be it a bank, financial institution, private lender, credit card company, employer or others. You may refer to it as security credit freeze as the option is explored only when there is a risk of personal identity theft and if financial information or private data has been compromised. Credit freeze is not the same as credit lock. All three bureaus, Equifax, Experian and TransUnion, have credit locks as a service that is chargeable but it is a product they offer. Credit freeze is a service mandated by federal laws and it should be available to all citizens. The laws are applicable for all credit bureaus.
What is a Credit Freeze?
Credit freeze is a voluntary process. A consumer may contact the credit bureaus and ask them to freeze the credit history or report. Basically, the credit file becomes a secret and is no longer accessible for anyone but the bureau and the consumer. Credit freeze or security freeze puts up a barrier so all requests made to Equifax, Experian and TransUnion by banks, lenders, companies and individuals to access a particular credit history, report or file will be turned down. The requester will receive no information.
A credit freeze is a voluntary process and it is not initiated by the bureaus or reporting agencies. The consumer should initiate this process, continue to have the file frozen and then choose when it must be thawed or unfrozen. A consumer has the right to remove a credit freeze at any point in time. The unfreezing may be temporary or permanent. The permanence is not etched in stone as a consumer can choose a credit freeze again in the near or distant future.
The enforcement of a credit freeze may also be temporary or permanent. Here again, there is no irreversibility in the process. It is up to a consumer to decide if the credit freeze should be time bound or for as long as necessary till further notice or instruction is issued. Bureaus often allow credit freeze for twelve months or for a preset period of time. The bureaus also allow for perpetual credit freeze till instructed otherwise. A credit freeze has nothing to do with the credit history, report or file. Nothing is removed or changed in the credit report.
Every piece of information remains documented as it is. There is no change to the credit score either. No consumer will experience any adverse effect of a credit freeze but for the fact that requests to access and assess a credit file will be turned down. In effect, a consumer will not be able to get a new loan, credit card, line of credit, mortgage and any other financial product or service that requires a credit check.
The Significance of a Credit Freeze
The most important reason why consumers consider a credit breeze and also why it is a federally mandated service is security. Identity theft is more common than one may imagine. Thousands of people are victims of identity theft every month. Not all cases get reported in the media but ordinary people have to endure the fallout’s. Data breaches have become far too common to consider them aberrations. Tech giants have been victims of data breaches, from outright data theft to hacking and phishing leading to denial of service attacks. Millions of people have had their data compromised, including sensitive information such as banking details, medical records, emails and social media profiles.
Credit freeze enables an ordinary citizen to prevent identity thieves, data thieves and anyone with access to the personal identity or data of them from using that information to get loans, credit cards and other privileges. Personal data can be used to apply for credit cards, loans, financial services and other products that will effectively be debts or liabilities of the victim whose identity has been stolen. These processes that are exploited by identity and data thefts can be disrupted with a credit freeze. If a bank, lender, financial institution or credit card company is unable to access the credit file of a person, then the thief misusing the personal details will not be able to avail the product or service. Thereby a victim is being protected from further exploitation.
A credit freeze does not just prevent thieves and those with mala fide intentions from getting what they want. The application processes are stopped midway and this can trigger the red flags that can alert the authorities. Companies initiating the access to credit history or reports due to an application filed by identity and data thefts will know there is a credit freeze, the credit bureaus will know an initiative has been made to access the file of a consumer when there is a security freeze, the concerned citizen may be informed immediately and the law enforcement agencies can be alerted. In the worst case scenario, a victim is protected against financial liabilities and misuse of their data. In the best case scenario, the perpetrators of identity and data theft will get caught and punished appropriately.
Removing a Credit Freeze?
You may want to remove a credit freeze when you have initiated a genuine application. If you are applying for a new loan, credit card or some financial service that requires a credit check, then you cannot have the file frozen as the application will be dead in its tracks. Removing a credit freeze may be temporary or permanent in a relative sense. You will have the right to freeze the file again. You can remove a credit freeze in its entirety or just for one particular request that you know will happen due to an application you have initiated.
You will need the unique personal identification number for removing a credit freeze. Every credit bureau issues its own unique personal identification number while enforcing a security freeze. You cannot remove a credit freeze with all three bureaus at once. Just as enforcing the security freeze requires you to work with all three bureaus separately, removing also warrants the same but the process is quite convenient. You may remove the security freeze for one particular application or for a brief period of time when the multiple genuine applications of yours will be processed. You can reinstate the security freeze thereafter. However, there are costs of freezing your credit file and unfreezing or thawing it time and again. You should factor in these fees charges by credit bureaus before you randomly freeze and unfreeze the credit file.
Freezing and unfreezing a credit file is a free service for those who have been victims of identity or data theft. If you have an actual case of being a victim, then you do not pay any fee and hence you can choose to freeze and unfreeze as you deem fit, albeit you must act as per the instructions of the experts, be it the law enforcement or credit bureau in question. If you are not a victim of identity or data theft, you can choose to have a credit freeze but at a cost. Not all credit bureaus charge a fee for this but you must check with each of them to be sure at the time of initiating a freeze or requesting an unfreeze.
The Process of Removing a Credit Freeze
You should remove a credit freeze before a potential lender or company will initiate the credit check. If the credit check fails due to the inaccessibility or unavailability of the credit file, then the lender or the company you have applied for any financial service with will reject your application. Time it right so there are no avoidable problems or delays. Credit bureaus are often steadfast with freezing a credit file. It happens instantly in most cases of identity theft and data breach. Unfreezing may not happen instantly. As per the federal law, credit bureaus can take up to three business days to process a request of removing a credit freeze and effectively unfreezing the file. Three business days may not sound much but if your lender or a company you are dealing with initiates the credit check in that time then the process will not be completed.
Removing a credit freeze is a simple process. You must choose if you want a temporary unfreeze or thaw, if you want one or select applications to be permitted, if you want the removal of the freeze to be permanent or you want it to be time bound wherein the file will be frozen again after the expected credit checks are completed. Here are the processes of removing a credit freeze with each of the three leading bureaus of the land.
Removing a Credit Freeze with Equifax
Equifax allows temporary removal of a security freeze specific to a creditor and in general for all enquiries or assessments. You can choose a preset timeline, for instance a day or perhaps a year, when your credit file will remain unfrozen. You may also choose a permanent unfreeze. You may unfreeze the credit file online or you can call 1-800-685-1111. You can also write a letter and mail it to Equifax Security Freeze at PO Box 105788 in Atlanta, GA 30348.
You must provide full name, present address, date of birth, social security number, required payment for the service and proof of identification when you send the letter in the mail. If you are calling or initiating the process online then you must use your ten digit unique personal identification number. The personal identification number should not be shared in writing through mail. If you have forgotten the personal identification number for the security freeze, you can use the retrieval process. Go to the official website of Equifax, use your personal identification number to initiate the security unfreeze or use the interactive voice response system available on (800) 349-9960.
Removing a Credit Freeze with Experian
Experian offers the same options of removing a credit freeze as Equifax. It makes the process a tad more convenient at its Freeze Center. The easiest option at your disposal is to visit the center and use your personal identification number to initiate the unfreezing. You can also call 1-888-397-3742 or mail a request to Experian Security Freeze at PO Box 9554 in Allen, TX 75013.
If you are sending a mail, then you should provide the necessary personal information including full name, personal identification number, social security number, date of birth and present address. If the present address is different from the one on your credit report or file, then include that bit of information as well. You must send at least one proof of identification. It is better to send two forms of personal identity proof.
Removing a Credit Freeze with TransUnion
TransUnion has similar processes as well for removing a credit freeze. You can do so online or on 1-888-909-8872. You may write to them if you want. Send a letter to TransUnion Security Freeze at PO Box 2000 in Chester, PA 19022. You must have the personal identification number handy. The letter should be accompanied by proofs of identification. Online requests are expedited so you may prioritize them. Mail anyway takes time and it is less secured than directly speaking with an official representative.
You may issue specific instructions if necessary given the needs of the hour. You can also explain why you want the unfreezing or thaw but it is not necessary. If you have been a victim of identity theft or data breach, then you may be asked if the situation has been resolved before the credit bureaus process your request and effectively remove the security freeze. The exact cost you must bear to either enforce or remove a credit freeze shall vary. The fee usually varies by state and also from one bureau to another. Victims of identity and data theft do not need to pay any fee for enforcing or removing a credit freeze.