How to Lock Your Credit with a Credit Freeze
Having the gift of credit is a wonderful thing. It allows you to get the crucial things in life that you need, like cars and houses and lines of credit for large purchases. Unfortunately, times are changing, and it's causing more people to get involved in credit scams and fraud. Therefore, you have to stay on top of your credit at all times and stay aware of what's going on in your report.
What Is Credit Freeze And How It Works?
Additionally, you might have to take extra steps such as a credit freeze or a fraud alert. Here is some information about credit fraud, fraud alerts, and credit freezes. We'll explain what you need to do if you need to lock down your credit with a credit freeze.
What Is a Credit Freeze?
A credit freeze is a safety measure that you might want to consider taking if you've been victimized by attempted or successful credit fraud. It's a complete lock of your credit report, meaning that no one can have access to it. New creditors, potential employers, apartment complexes, and other entities cannot access your credit report to perform a check. You can't even access your report unless you contact the bureau and go through some steps.
Benefits
The good news is that it's free to freeze your credit. You can also lift your freeze if you know that someone important is going to be checking it some time soon.
You can lift it for one day, several days, or some months if you need to. You can also completely remove the freeze if you feel that you've had it on your account long enough.
The credit freeze is one of the most effective ways of protecting yourself from fraud. Many people use it, and it helps. Not only does it reduce the potential for fraud, but it also keeps out nosy parties who browse credit profiles to look for marketing prospects. Thus, you can rest from getting a lot of the annoying telemarketing calls that might normally come your way.
Downsides
The downside to a credit freeze is that it won't protect you when a scammer has gotten logins to your accounts. Then, you would have to take additional measures to secure and reclaim your account. You may have to ask for a new card and change your password. You may also have to put a new security measure in place for the account that has been compromised.
Another con is that it can delay some important processes for it because it takes time. You have to go through some procedures and checks every time you want to allow someone to check your credit. It can be exhausting, but it’ll give you the strong security that you need to get you through a rough patch if someone has tried to harm you in some way.
Steps for Getting a Credit Freeze
You will have to do your credit freeze with all three major credit bureaus for maximum effectiveness. The three major credit bureaus are Equifax, Transunion, and Experian. You have a choice of either doing it online or doing over the telephone. Choose the option that is the most comfortable for you as you don't want to stress yourself at all.
Once you get in touch with someone, you will need to let that person know your name, address, social security number, date of birth, and so on. You will then have to go through a verification process to ensure that it's your account they're getting ready to freeze. You will receive a PIN once you verify your account and the freeze has been put in place. The PIN is for you and you alone. Do not share it with anyone intentionally. Furthermore, you want to make sure that you put it in a safe place so that no one else can gain access to it. You'll use the PIN to unfreeze your account when you need to and then freeze it again when you want.
You could also use any of the credit bureaus' sites to do your credit freeze. They all offer online services. You'll have to go through the same process as the telephonic process. You'll start by entering your name, address, birth date, social security number, and so forth. You'll then be taken to a new screen that will ask you some information about verifying your identity. When you are finished verifying your identity, you'll receive your pin, and your security freeze will be in place. Again, you can unfreeze it and refreeze it whenever you desire.
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What Is a Fraud Alert?
A fraud alert is pretty much what it sounds like. It's a system that the credit bureaus have set up for people who believe that their information has been somehow compromised.
You can get an initial fraud alert for 90 days, and you can extend it if you need to. The way it works is that creditors will have to take extra steps if you want to apply for credit. They will have to take some steps to prove that you're the one applying for credit. They will have to contact you if a potential credit tries to process an inquiry. You'll then have to verify that you were the one who tried to set up the account. You'll verify it by providing your identification or answering some personal questions that only you would know.
If everything is clear, you can proceed with the credit application as usual. If you find out that someone else has been trying to open an account in your name, you will need to take appropriate measures to ensure that they don't do it again. It's up to you how you want to handle a situation that involves fraud. It's your personal information, and you have the right to resolve it any way you so desire.
Fraud alerts have a medium level of effectiveness. The positive side of getting a fraud alert is that it doesn't completely lock your credit. It will keep you up to date about what's going on with your credit, but you don't usually have to go through a lot of stress to access your report. Many consumers have fraud alerts on their accounts, and they're happy with the level of effectiveness.
Steps for Getting a Fraud Alert
A fraud alert is something you might want to try. It lets all the creditors know that you may be a fraud victim. The creditors must take extra measures to make sure that you are the one applying for credit whenever they notice that you are trying to open an account.
For example, they might need to call the store that you're in to verify that you are the one requesting a credit account. They may ask you to present your identification immediately, as well.
To initiate a fraud alert, you'll need to contact the credit bureaus. Let them know what's going on, and then verify your identity by answering a few questions they might ask you. Your fraud alert will be in place after you verify your identity. Your initial fraud alert will be on your report for 90 days. You can contact the bureaus and have your fraud alert extended for seven years if you feel like you need to do that.
However, the extended alert requires you to have a bonafide instance of fraud on your plate. You have to file a report with the Federal Trade Commission to prove that it has happened. A police report will come in handy, as well. You don't need to be a victim of fraud for the initial alert. You only have to suspect that someone has tried to commit it.
What to Do if You're a Victim of Fraud?
You can take one of many routes if someone has victimized you due to credit fraud.
1.Investigating Fraudulent Accounts
You can dispute fraudulent accounts that you find when you conduct your score check. The credit bureaus are obligated to investigate any report of a fraudulent account that they get. They have a total of 30 days to complete their investigation. If they find that the account is not yours, they will remove it from your report. You will not be held liable for the charges in most cases.
2. Filing a Report
If something does happen that leaves you liable for the charges, you can file a police report with the local authorities. That will give you some documentation that you can take to court with you if you need to. You can also report the incident to the Federal Trade Commission.
3. Notifying All the Creditors
Thirdly, you can notify all of your creditors of what happened and tell them to be on the lookout for any future shady activities. The situation will work out in your favor eventually. You may have to go through some aggravating steps, but you will be okay in the end.
Fraud that happens because of family members is a little more difficult to resolve. You may end up being liable for the debt, and you might not want to take your family member to court or report that person to the police. What you can do, however, is you can try to urge the family member to take care of the debt and admit that he or she is responsible for it. The creditor can then change the responsibility to that party instead of you.
Tips for Protecting Your Credit
Now you know what to do if you need to put a fraud alert or credit freeze on your entire credit report. These are some additional tips that will help prevent any fraudulent activity from happening in the first place. Try them out for a while and see if your situation improves.
It might be in your best interest to sign up for a credit monitoring service. The service may cost you a little bit of money each month, but it will be well worth it in terms of protection. Credit monitoring services keep an eye on the activity that goes on with your social security number.
The system will notify you if it notices and new credit inquiries on your report. That way, you can catch fraud before it happens, and you can do something about it. Some credit monitoring services also give you updates on your score so that you know where you stand, as well.
You must avoid sharing your personal information as much as possible to avoid credit card fraud and other malicious activities. Your social security number, license, and other personal information should only be given to entities that require it. It's okay to share your social security number and license with a new employer because you have to if you want to work. Otherwise, you should be reluctant to share it.
Don't allow friends, family members, or acquaintances to have the information. Be very careful when you eat out at restaurants or sign up for online service, as well. Furthermore, do not give your personal information over the phone or in an email for any reason. We are approaching trying times, and every debtor has to take extra measures to protect his or her finances.
More hackers and scammers are using the phishing strategy to try to get personal information from debtors these days. The way they do it is they create a page that looks like that of a financial provider you might use, such as your bank or PayPal. Sometimes, they use shopping outlets and phone companies, and they pretend to know that you have an account with them.
They will send you an email explaining to you that your account has been limited or locked due to "suspected fraud." The email will then urge you to click on a link and "update your personal information." Do not fall for this trick. Financial institutions do not send such emails, and they certainly don't refer to their customers as "dear customer" or some other such generic name.
Do not click on any links you receive in an email, and report any message that you feel might be a fishing attempt to the fraud department.
Another thing you can do to protect yourself is to put fraud alerts on your cars. You might be able to sign up for these alerts online. The card company will call you or send you a message if they suspect unusual activity on your car. You will then have to verify that you were the person who tried to complete the transaction. This method is a very safe method that will help you to keep your losses down.
Another security measure you might want to think about is changing the way you pay for online goods. The number of debit card jackings is on the rise nowadays because of the struggling economy. Scammers are desperate to get cash in any way possible, and they do not care about who they target. It's much safer for you to use a credit card for your online purchases than a debit card.
Debit cards are attached to the funds in your bank, whereas credit cards are not. A scammer or hacker might be able to empty your entire bank account with one purchase if you leave your debit card vulnerable. On the other hand, your credit card will have a limit. Furthermore, most credit card companies offer fraud protection to their customers. That means that you won't be held liable if you're a victim of credit card fraud.
Think about using your credit card instead of your debit card the next time you want to make a purchase online. It'll be much safer for you, and you'll have better recourses if something unfortunate happens. And if you, by any chance, do not have a credit card yet, take a look at some great options below:
Reach out to Us if You Need More Help
Now you understand why you might need a credit freeze and what you'll have to do if you need one. You should be able to lock your credit with no problem if it's necessary. Reach out to us if you need any additional information on credit security measures. You can also contact us if you need help with any aspect of personal finance. Personal finance topics are our specialty.
We work with consumers of all ages and credit classes to ensure that they have the tools they need to succeed. We are not a lender of any kind, but our network of financial specialists includes lenders. We can also connect you with counselors, advisors, and other such professionals who can help you with a broad range of topics. Some of the areas we cover are credit management, debt management, mortgage loans, credit cards, personal loans, consolidation, money-saving, investments, and more.
Just tell us what you need help with, and we'll find a way to get it for you. Contact us by short-form or the telephone to get started.