I Froze My Credit–Should You?

It seems like every time I turn on the TV I hear about another company getting hacked and more people’s personal information getting into the wrong hands.

I received a phone call yesterday from a former colleague and good friend.  The accounting company that does her taxes was hacked.  Her four children and her own social security, address and dates of birth are now likely being offered to the highest bidder on the internet.  With that information, someone can easily file fraudulent tax returns, apply for credit, obtain medical services and wreak other havoc with their lives.

Last year, two of my friends had their tax returns filed fraudulently.  Someone else received their tax refunds before the real people had the opportunity to file their returns.  They spent hours going to the Internal Revenue Service offices to prove that the returns were filed fraudulently and confirm their identity so they could receive their own refunds.

To combat this risk, I can spend anywhere from $100 to $329 each year to have a company monitor my credit and reimburse me for lost funds.  Or I can protect myself by spending an hour freezing my credit for free.  This only works because I am not routinely seeking new lines of credit–mortgages, credit cards etc.

I went to annualcreditreport.com and from there, logged into each of the three credit bureau’s (Experion, Transunion, and Equifax) and requested that they freeze my credit.  I had to prove my identity by providing information about my outstanding accounts and addresses but from there it was super simple.

If I need a new credit card or loan, I will find out which credit agency the lender uses and unfreeze my credit with that agency temporarily.  They will charge a small fee of $10 to $20 and I will need a special password I was provided at the time I froze my credit.  I haven’t done this yet but it should be super easy.

An additional benefit of freezing my credit is I no longer receive those preapproved credit offers in the mail.  I always ended up with a pile of them to shred so I don’t miss that exercise at all!

Here’s another free credit hack.  Each credit agency has to provide you with a free credit report each year.  If you wanted to review your credit more frequently, there was a small charge.  In the past, I would log into all three of them and check them at the same time.  The three reports were always the same.  Now I look at one report each four months.  January 1st, I check one, May 1st I check another and September 1st I check the third.  This allows me to keep an eye on my credit report year-round for free.

How do you protect your credit and your identity?

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Author: Ms. Liz

A CPA, I retired at 51 and I am helping people create their fantastic futures!

3 thoughts on “I Froze My Credit–Should You?”

    1. Great question–thanks for asking it! I review my reports for three reasons. One is to make sure no one else has applied for credit under my name. With my credit now frozen, this shouldn’t be possible but it is best to keep an eye on it. The second reason is to make sure there are no errors on the report–balances or late payments that are incorrect. Third is to make sure I need and use the credit cards that I have. Remember getting 10% off if you applied for a store card? Those cards tend to be forgotten and should be carefully closed. I say carefully because closing lines of credit can hurt your credit rating so if that matters to you, you could close one every year or so without affecting your rating significantly.

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