Q&A: How Does a Credit Freeze Protect My Information?

If your personal information has been compromised, you should consider a credit freeze to prevent fraudulent credit accounts being opened in your name. Telemundo Nueva Inglaterra's Betsy Badell and NBC10 Boston's Rob Michaelson explain.

Rob: They say be prepared for anything, and with scammers stealing people's identities and opening up fake credit applications. How do I prepare for something like that?

A credit freeze can prevent scammers from applying for credit in your name.

Betsy: Well, Rob, you can initiate credit freeze or just block access to your credit report. This way, any lender who wants to create a new account or open a new credit under your name will not be able to do it without your direct consent.

Rob: That's great. I mean, you're icing out the scammers and keeping fraud at bay. So how do I go about doing a credit freeze?

To get started, you need to contact TransUnion, Equifax and Experian three major credit bureaus

Betsy: Well, in order to freeze your credit, you need to contact each one of the three major credit bureaus. That includes TransUnion, Equifax and Experian, you need to contact them by phone. You can also do it online or by mail. You will need your Social Security number, date of birth and address. You might also need a form of identification, or they may do one of these two factor authentication with you in order to make sure that it's you who is freezing the credit. It would be a good idea to make sure 100% that you are talking to the credit bureau that you want to talk to when you're giving this information like your Social Security, because it is sensitive information and there are scammers out there.

You will need proof of identity.

Rob: All right. So once it's frozen, is there a way to unfreeze it or at least thaw out when you need it?

A credit freeze generally lasts a year, but it can be temporarily stopped.

Betsy: When you freeze your credit, it's usually frozen for just one year, so that's something to keep in mind. You can unfreeze it temporarily if you need to open up credit for, say, maybe a mortgage, but you need to do this in advance. It does only take a few minutes. You just need to call and give them the pin to unfreeze that. They will provide that to you.

Rob: So it's frozen, it's locked away. But can you see your own information or anyone else for that matter?

Creditors and certain agencies can see your information.

Betsy: You can see your own information. Current creditors marketers and some government or even child support agencies may also have access to this information. An employer or a potential employer employer can also have a limited access or permission to look into your credit.

Rob: So there seems to be a lot of advantages to doing this. So should I just keep it frozen all the time?

Betsy: You don't need to keep it frozen all the time unless, of course, you feel that your identity has been jeopardized. It'll keep your account safe and more importantly, your money.

Make sure to unfreeze your report when actively looking for a new loan.

Rob: And finally, Betsy, are there any drawbacks to using a credit freeze?

Your insurance rate might increase in states where credit information is used to set rates.

Besty: It might get on the way, if you are actively looking for a new loan, say for actively looking for a house or trying to buy a car, you do have to temporarily unfreeze it. Another setback is if you are looking to save money on car insurance. Insurance companies may not have access to your credit report and therefore may be able to increase your rates rather than lower your insurance rates because I don't have access to your credit. So those are the only two things to keep in mind. But freezing your credit does help keep scammers at bay so you can freeze it. Do it.