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Should You Freeze Your Credit to Protect Against Fraud

Freeze Your Credit to Protect Against Fraud

Illustrative graphic showing a 'Credit Report' sign with icicles and the word 'FROZEN' across it, symbolizing credit report freezing as a measure to prevent fraud, presented by Huff Insurance in Pasadena, MDIn today’s digital world, protecting your personal information has never been more important. Identity theft and fraud are on the rise, and one effective way to safeguard yourself is by freezing your credit. Let’s explore why freezing your credit is a wise decision and how it works as a shield against fraud.

Our Story Regarding Freezing Credit to Protect Against Fraud

During the Covid times of 2020-2021, Nancy experienced an attempted ID theft and fraud.  Nancy was working as usual at her desk, when she received a call from the Small Business Administration loan office.  The loan administrator stated that they wer about to fund a loan that was requested in Nancy’s name and Huff insurance’s name.  She wanted to make one last verification call because the email used in the application looked suspicios and the bank used to apply was located in Virginia.

It is a good thing she made that call, because Nancy dod not apply for that loan.  Someone had obtained all of the information needed to apply for a $65,000 loan in Nancy’s name.

We have ID teft coverage on our Nationwide Insurance policy, so Nancy immediately called them to get tehir advice.  The first thing they said to do was to put a freeze on the credit reports for all 3 credit bureaus, which she did.  Nationwide’s program also has a credit alert system.  So any time there is an attempted credit inquiry, we get notified.  Please check with your insurance carrier to se if they have ID theft coverage, and if so, do they have the credit alert system.  You can also check with your credit card companies to see if they have a similar option.  I have seen that Chase, Discover and American Express all of similar featurews for credit monitoring for free.

Understanding Credit Freeze: A Strong Defense Against Fraud

A credit freeze, also known as a security freeze, acts like a padlock on your credit reports. When you freeze your credit, you restrict access to your credit report, making it incredibly challenging for identity thieves to open new accounts in your name. This step is especially crucial if your personal information has been compromised in a data breach.

Simple Yet Effective: Freezing Your Credit

Initiating a credit freeze is simpler than you might think. The process involves contacting each of the three major credit bureaus – TransUnion, Equifax, and Experian. You’ll be required to provide some personal information, but rest assured, it’s a free service. It only takes a few minutes with each bureau.  But it can save countless hours and frustration should your become a victim of a credit crime.  You can also unfreeze your credit at your convenience, which is handy when applying for new credit.

No Impact on Your Credit Score

A common concern is the impact on credit scores. However, freezing your credit does not affect your score. It simply restricts potential creditors’ access to your credit report. Your current creditors and certain government agencies will still have access, ensuring that your regular financial activities remain unaffected.

Flexibility with Unfreezing Your Credit

Need to make a big purchase or apply for a loan? You can unfreeze your credit temporarily, allowing for necessary credit checks. This flexibility ensures that your credit freeze doesn’t become an inconvenience in your daily financial transactions.

Make sure to only unfreeze your credit for the minimum amount of time for your loan or purchase to get approved.  We were going through a refinance with our home.  Nancy unfroze her credit for a 72 hour window.  And believe it or not, in that time, someone tried to open up a credit card in her name again.  The fraudsters and bad guys are slick and use top end technology to try to separate you from your hard earned money.

A Potent Tool in Preventing Identity Theft

Credit freezes are particularly effective if you have previously been a victim of identity theft or if your personal information is at risk. By freezing your credit, you proactively prevent the misuse of your information, giving you peace of mind.  Our son took the proavtive step to freeze his credit at age 20.

Step-by-Step Guide to Freezing Your Credit to Protect Against Fraud

To freeze your credit, follow these steps:

  1. Contact each credit bureau individually (Equifax, Experian, TransUnion).
  2. Provide the required personal details like your Social Security number.
  3. Confirm the freeze with each bureau.
  4. Remember, you can lift this freeze temporarily whenever necessary.

Other Considerations: Fraud Alerts and Monitoring Services

Besides freezing your credit, consider setting up fraud alerts. These alerts add an extra layer of protection, requiring businesses to verify your identity before extending credit in your name. Additionally, credit monitoring services can alert you to any unusual activities on your credit report, enabling you to act swiftly in case of any suspicious transactions.  Check with your Home Insurance, Auto Insurance, or Renters Insurance company to see if they offer this service.  You can also check woth your current credit card companies and banks to see if they provide this as well.  Some have started offering this as a free service at a basic level.,

Conclusion: Empowering Yourself Against Credit Fraud

In the fight against identity theft and fraud, freezing your credit is a powerful and proactive step. It provides substantial protection without affecting your credit score or everyday financial activities. With the ease of managing this freeze, you maintain control over who can access your credit report, ensuring that your financial health remains secure.

For anyone concerned about their financial security, particularly in this era of increasing digital threats, freezing your credit is a smart and effective strategy. It’s a step that empowers you to protect your financial future, and with the steps outlined above, it’s easier than ever to implement.

Stay informed, stay protected, and remember, for more expert advice on safeguarding your financial information, Huff Insurance is here to help.

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