Personal Finance

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.

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