This Free Tool Can Protect You From Credit Card Fraud. Here’s How to Use It

Photo to accompany story about how to freeze your credit. Shutterstock

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With people spending more time online and at home due to the pandemic, and widespread worry about the coronavirus, internet scammers are trying to exploit the situation to their advantage.     

Sometimes, they may even pose as the Centers for Disease Control or the World Health Organization, two groups that have become household names during the pandemic, to try and steal personal data. 

“Fraudsters are targeting the uncertainty we have about COVID-19 by sending us scams via phishing emails, text messages, and calls purporting to be from legitimate agencies such as the CDC or WHO,” says David Putnam, head of identity protection products at cybersecurity software maker NortonLifeLock.  “Don’t take the bait.”

Fraud can cause financial damage, particularly if left unchecked, as well as emotional harm. If you’re worried about becoming a victim of fraud, a credit freeze can be an effective tool to prevent it. It allows you to restrict access to your credit report, which makes it difficult for scammers and identity thieves to open new accounts in your name. 

And it’s free. 

Knowing how a credit freeze works will make the process smoother if you decide to do it. Here’s everything you need to know.

Should You Freeze Your Credit?

If your personal information falls into the wrong hands, for instance through a data breach or a phishing email — a message with an attachment that installs malicious software on your device —  you may want to consider a credit freeze. 

Scammers and hackers can exploit your exposed personal information, like your name, address, date of birth, and Social Security number, to commit financial fraud. They may also sell your data on the dark web, which is made up of sites that don’t appear on search engines and can be accessed only with a special browser.  

Pro Tip

If you don’t want to receive preapproved offers of credit or insurance, click the “opt out of offers” button when you’re going through the process of freezing your credit.

If you start receiving bills for credit accounts you didn’t open, for example, or medical bills you don’t recognize, that’s a sign that you might be a victim of identity theft. Or you may also  receive calls from a collection agency seeking payment for a credit you never opened. 

That’s when a credit freeze can come in handy. It ensures that no one will be able to open new lines of credit or other accounts in your name, and may decrease the number of cases of fraud committed using your personal information. 

However, thieves can also do a lot with stolen identities that does not involve accessing your credit, and that’s where a freeze won’t help.  

“It’s important to know what credit freezes do and don’t do,” says Rod Griffin, senior director of consumer education and advocacy at credit agency, Experian. “There’s an impression that if you freeze your credit, it will prevent identity theft. That’s absolutely not true. I stress that because I don’t want people to have a false sense of security.”

How to Freeze Your Credit For Free

Freezing your credit is completely free, so you can quickly protect your credit information from potential fraud without worrying about fees.    

To freeze your credit, you’ll need to put in a request with each of the three major so-called credit bureaus, which also track credit scores: Equifax, Experian, and TransUnion. The process for requesting a credit freeze is pretty straightforward and similar across the three firms.  

You’ll have to provide some personal information, including your name, address, date of birth, and Social Security number. The credit agency will then give you a personal identification number or password to manage your credit freeze. 

It’s important that you keep track of this password because you’ll need it to unfreeze your credit. Typically, a credit freeze can last for as long as you want.

The process is similar for a parent who wants to put a freeze on their child’s credit file.

“Once you find the correct location to freeze with each bureau, people are often surprised to find that placing a credit freeze is really quite simple,” Putnam says. “You can complete a request in just a few minutes online or by phone, and the turnaround time is quick.”

Putnam says credit agencies are required by federal law to place freezes within one business day, and when you’re ready to lift the credit freeze, the agency has to lift it within one hour of your request. 

The difficult part is finding the correct contact information for each bureau, so we rounded it up for you. Here’s how to contact the three major bureaus online or by phone.

  • Equifax

Equifax.com/personal/credit-report-services

800-685-1111

  • Experian

Experian.com/help

888-EXPERIAN (888-397-3742)

  • Transunion

TransUnion.com/credit-help

888-909-8872

You can also request or lift a credit freeze by mail. If you decide to freeze your credit by mail, here’s where to send your requests:

  • Experian Security Freeze

P.O. Box 9554

Allen, TX 75013

  • TransUnion LLC

P.O. Box 2000

Chester, PA 19022-2000

  • Equifax Security Freeze

P.O. Box 105788

Atlanta, Georgia 30348

Are There Any Downsides to Freezing Credit?

Credit freezes have some disadvantages. While the process is simple, you have to contact all three credit bureaus, which can require some time. And you have to take extra care to keep track of the personal identification numbers that each credit agency gives you.

If you’re applying for a job, renting an apartment, buying insurance, or opening other new lines of credit, you have to lift the freeze to give potential creditors access to your credit file.

While credit freezes can prevent new fraudulent lines of credit from being open in your name, they will not stop bad actors from using your existing credit accounts to commit financial fraud. That’s why it’s wise to still closely monitor credit card, bank, and insurance statements for fraudulent charges. 

Alternatives to Freezing Credit

If you’re not keen on the idea of freezing your credit, there are a few alternatives.

For example, you have the option to get a credit lock instead of a credit freeze to protect your data. A credit lock offers similar control over your credit file as a freeze by a credit bureau, but it has fewer legal protections and may require a fee. 

You could also put a fraud alert on your credit reports if you think your personal information is in danger. The alert lasts one year and allows creditors to access your credit report, as long as they take the proper steps to contact you and verify your identity, according to the Federal Trade Commission.

But if you have a fraud alert on your credit report, there are no repercussions if a company doesn’t contact you before giving someone credit. Additionally, credit reporting agencies can still sell your information, even with a fraud alert in place. The three major credit bureaus are allowed to include your name on lists used by creditors or insurers to make firm offers of credit or insurance, but a credit freeze would prevent them from selling your information. 

Credit monitoring services are another option. These services may be able to alert you of suspected identity theft, but can’t prevent all identity theft, Putnam says.

“Credit monitoring services should be considered complementary to credit freezes, not a substitute,” he says. “It’s a great time to be in tune with your credit. Check your credit report, consider a freeze, or fraud alert. If you’re not planning to open any new accounts, you should definitely consider a credit freeze.”