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A credit freeze is also referred to as a security freeze. When people freeze their credit, they are restricting access to their credit reports. That means creditors cannot access their credit files, so they cannot update them or change them while frozen. In many cases, this is done to prevent identity theft by keeping thieves from accessing accounts.
People tend to do this when they are vulnerable to or at risk for identity theft. For instance, many people likely took this step after the Equifax security breach. A credit freeze is a temporary solution though. Most people do not want to have their credit frozen for the long term. Those who wish to unfreeze their credit need to go through a few steps.
Steps to Unfreeze Credit
When people freeze their credit, they use pin numbers to authorize the move. Consumers who want to reverse a frozen credit report request need to use those same pin numbers. Each credit bureau takes a different approach to pin verification, meaning it’s likely that consumers will end up with three different pins for each major bureau. Those who do not have access to their pin must go through a process to retrieve it.
There’s a different process for pin retrieval with each credit bureau. For example, Equifax requires pin retrieval requests to be submitted in writing. Identity theft victims don’t have to pay a fee for a replacement pin, but non-victims do. Experian allows consumers to make pin retrieval requests online. They also have the option to call in order to have the pin mailed. Transunion issues pin numbers to consumers who call in.
After obtaining the pin number, consumers must decide what they want to do with the freeze. A temporary release option allows consumers to unfreeze their credit for a specific time period. This is a good option for those who need to apply for new credit during the temporary unfreeze.
Those who do not wish to have their credit frozen any longer can lift the freeze permanently. Then, creditors will have access to their reports once again until further notice.
Equifax and Experian charge a small fee for lifting the freeze, but Transunion does not. The fee might be waived for victims of identity theft.
Consumers need to unfreeze their reports at all three bureaus unless they are doing a temporary freeze and know which bureau a new creditor will use. That is not easy to find out, so it’s much more efficient to unfreeze credit with all of the bureaus at once.
The Impact of Unfreezing Credit
States have laws that govern freezing and unfreezing credit. In most cases, credit is “thawed” immediately, but it might take up to three days to unfreeze credit depending on state guidelines. Unfreezing credit does not impact one’s credit score, but it does impact the person’s ability to apply for credit. Once unfrozen, creditors can pull credit reports, review them, and make credit decisions.
Unfreezing credit also makes the person vulnerable to identity theft. If someone gains access to the person’s personal information, he or she can apply for credit. Since the credit is no longer frozen, that person is also able to get a credit decision.
Of course, there are other less invasive protections available, such as fraud alerts. With a fraud alert in place, companies must verify the applicant’s identity before issuing credit. In many cases, the business contacts the individual directly. This makes it hard for identity thieves to open up fraudulent accounts.
Is a Freeze the Right Choice?
A credit freeze is an excellent choice for those who fear that their credit is vulnerable. Those who have been compromised in some way can freeze their credit and then remove it when the time comes. While it does cost a little bit of money, it is almost a failsafe tool. A potential identity thief cannot get credit in the victim’s name when their credit is frozen.
Author: Jeff Gitlen