Category Archives: Credit

Why Should You Freeze Your Credit?

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I first heard about how to freeze your credit on the Clark Howard radio show several years ago. photo

Why would you want to freeze your credit?  As Clark states in his Credit Freeze and Thaw Guide, “credit freezes are one of the most effective tools against economic ID theft available to consumers.”  It is a quick, easy, and a low-cost alternative to paying for a credit monitoring service.

What is a credit freeze?  Wikipedia describes it this way. “A credit freeze, also known as a credit report freeze, a credit report lock down, a credit lock down, a credit lock or a security freeze, allows an individual to control how a U.S. consumer reporting agency is able to sell his or her data. The credit freeze locks the data at the consumer reporting agency until an individual gives permission for the release of the data.”

How do you freeze your credit?  Clark’s guide is the best source I’ve found to date. It outlines how to contact each of the three major credit bureaus and how to thaw them.

After several of my family members and clients had their identities stolen, I finally got around to freezing my personal credit this past summer.  It was pretty painless and took no more than 30 minutes to complete (and cost less than $30 total – the cost depends on your state).  Check it out and see if it makes sense for you.

Time to Pull Your Credit Again – But Why Should You?

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  1. It is free at www.AnnualCreditReport.com.  Make sure you use this site and not the sites you see on TV with the catchy jingles.  Those sites are not free even though “free” is usually in their names.  This central site allows you to request a free report once every twelve months from each of the national reporting companies: Equifax, Experian, and TransUnion.photo
  2. You can keep current by pulling a different reporting company every four months.  You get one free report from each of the three national reporting companies every twelve months so pull your Equifax this time, Experian the beginning of May, and TransUnion in September (3 companies over 12 months equals one every four months).
  3. It only takes about ten minutes to do.
  4. Spot identity theft early without paying fees to monitoring companies.  When you request the free reports, the reporting company may try to sell you monitoring service or credit scores.  I generally purchase my credit score once per year (cost of about $7.00) but you could use sites like www.creditkarma.com instead (beware of the non-stop sales pitches though).
  5. Verify the accuracy of your credit report by proactively spotting errors and cleaning up old accounts.  You should review the report in detail and contact the reporting company with any errors.  This is also a good time to scan the report for old accounts or accounts you no longer use.  You will be surprised by the ghost accounts still living out there in the spooky credit universe.

Pulling your credit every four months is a great habit to establish (not a ton of fun but not real difficult or time-consuming either).  In a future blog post, I’ll discuss freezing your credit to further protect yourself against identity theft.