After Equifax’s huge data breach last year, 145 million consumers were at risk of identity theft. Equifax offered free credit freezes to people affected by the information hack until June 2018. Lawmakers say it’s not enough and consumers shouldn’t have to pay fees to lock down their personal information. They’ve called for more safety measures that would protect consumers from long-term damage to their credit report and expenses associated with managing this type of large-scale data breach.
After stating the importance of consumer access to these services, Congress has decided to help consumers limit access hackers may have to their personal information. The Senate passed the Free Credit Freeze Act and the House will soon vote on this important amendment to the Fair Credit Reporting Act. It prevents consumer reporting agencies from charging consumers a fee to place, temporarily lift, or completely remove a credit freeze.
Under the new law, credit reporting agencies would have just 24 hours to fulfill a consumer’s request online or over-the-phone. The credit bureaus would have 3 business days to fulfill the request if it was made by mail.
What is a credit freeze?
A credit freeze prevents the credit reporting agency from releasing personal information about a consumer without their permission. They happen by request of the consumer. Credit bureaus charge a fee to place, temporarily remove, or permanently remove a credit freeze.
Initiating a freeze makes your personal information inaccessible to everyone, including potential lenders. If you freeze your credit, you can’t get new loans or credit cards unless you temporarily unfreeze it to allow a company to access your credit file.
For people who have concerns about potential identity theft, freezing their credit with all three bureaus is the most effective way to prevent unauthorized people and companies from accessing personal information.
Thieves can’t open new accounts in someone else’s name if there’s a freeze on that person’s credit with all three of the credit reporting agencies.
How much does it cost to freeze credit?
Currently, the costs to freeze credit vary by state. Freezing credit with all three bureaus would cost most Americans about $30. Lifting the freeze for a specific lender would cost about $10 for each credit reporting agency. In some states, the fees are lower for consumers who are over the age of 65 or who can produce a police report proving they’ve been the victim of identity theft.
How to freeze your credit
Each of the three credit bureaus offers information about how you can freeze your credit on their websites.
Experian: Initiating a credit freeze doesn’t prevent prescreening offers or current creditors from accessing your credit file. Experian issues a PIN to anyone who wants to freeze their credit file, so they can un-freeze or temporarily lift the freeze.
TransUnion: Through the TransUnion website, you can limit access to your credit file for a certain amount of time or limit access to a specific lender.
Equifax: Until June 30, 2018, all fees are waived for anyone who wants to place a voluntary freeze on their Equifax credit report. If you decide to freeze your Equifax credit report, the company will send you a PIN number as part of the verification process.
For more great information on all things credit-related, head to our 'Basics of Credit' reference page.
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