Law Making Credit Freezes Free Now in Effect

Starting today — Friday, September 21st — U.S. consumers can elect to “freeze” their credit reports without paying a fee. This comes just over a year after Equifax announced that personal data from 148 million customers had been compromised following a security breach at the credit bureau. In the aftermath of that massive hack, focus was turned to credit freezes as a way for consumers to protect themselves from fraud, however many also quickly learned that initiating these protections would cost between $2 to $10 depending on what state the user resided in. As CNN notes, this led Congress to amend the Fair Credit Reporting Act and prevent the three major credit bureaus from charging for freezes.

Freezing your credit reports is a move that’s been championed by experts because it helps prevent bad actors from being able to open fraudulent credit accounts in your name. That’s because, when a creditor attempts to pull a report as part of their approval process, they’ll be unable to obtain it. Additionally, should consumers need to legitimately apply for credit, temporary lifts or “thaws” could be requested, allowing creditors to access reports for a limited time. Unfortunately these lifts also charged fees, likely dissuading some consumers from obtaining freezes in the first place.

To request a credit freeze, consumers can visit the websites of the three major credit bureaus: TransUnion, Experian, and of course Equifax. In some cases users will be asked to choose a PIN that will be required when making changes to a freeze, while other bureaus will assign these PINs. Although most customers will find the process of requesting a freeze to be simple, others may run into issues if the bureau in question can’t properly confirm the user’s identity. In these cases, they may need to send in further proof before a freeze can be issued. As Experian’s director of consumer education and advocacy Rod Griffin explained to USA Today, “We want to make it is as simple as possible to access that freeze, but we want to protect you at the same time. We need to strike that balance.”

Although the ability to freeze your credit without paying a fee certainly doesn’t make up for the damage that was done in the Equifax hack, it is at least a silver lining. Thanks to this new law, there’s now one more big reason for those who haven’t yet frozen their credit to do so. That said, if you do plan on applying for a loan, mortgage, or other line of credit in the near future, you may want to hold off on a freeze until everything is settled. Finally, even with a freeze in place, it’s always important for consumers to remain vigilant and keep a close eye on their credit to help prevent identity theft and other forms of fraud.

This is a good news, but will this be temporary or just until just the issues with Equifax hack is resovled?

Great news for having a free credit freeze but we know that credit freeze does not protect everything so we should still be vigilant for frauds with our accounts.

The cost of freezing and unfreezing our account can really add up. Thanks for this law, we can now have a free protection from scammers.

Comments are closed.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Carbon Credit API Cloverly Joins Visa's FinTech Partner Connect 

Last year, Visa introduced the FinTech Partner Connect program to the United States, with the goal of introducing institutions to vetted startups that could help them expand their product offerings. Now, the latest company to join the program is Cloverly. Founded in 2019, Cloverly is an API for carbon credits, allowing businesses and consumers to help fight climate change. As the company points out, with the Visa partnership, Visa clients...

Prosper Announces $75 Million Growth Capital Financing

A long-admired FinTech has added some new capital to its coffers and it continues to grow after more than 15 years in business. Recently, Prosper Marketplace announced that it had closed a $75 million debt financing round. This capital came from a fund managed by Neuberger Bergman and will be used to help Prosper meet the demand for its loans, credit card, investment products, and more. According to the company,...

Small Business Saturday 2022 Drives Projected $17.9 Billion in Sales

This past weekend saw the kick-off to the holiday shopping season with Black Friday followed by Small Business Saturday. Now in its 13th year, the latter is a promotion meant to raise awareness for small local businesses and encourage consumers to support them. Now, the initial figures from this year's event have arrived. According to American Express (which actually invented the retail holiday in 2010), an estimated $17.9 billion were...