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I Froze My Credit. Is it Time to Unfreeze it?

In an era when data breaches feel like a daily occurrence, consumers are going further to protect their credit. Enter the credit freeze.

What Happens in a Credit Freeze?

A credit freeze restricts access to your credit report, thus stopping any of your personal data from being reported to lenders and credits. If someone tries to use your identity to apply for a credit card, for example, the bank is unable to run your credit and the application is rejected.  

No brainer, right? Not so fast. First off, credit freeze won’t protect you from all forms of theft. If your credit card falls into the wrong hands, a thief will still have full reign. Secondly, if you need to borrow money soon — for a car loan, mortgage, personal loan — the hassle might not be worth the trouble.

Is identity theft insurance worth it?

First, let’s talk setting up a freeze.

To freeze your credit, you need to inform one of the three major credit bureaus — Equifax, Experian and TransUnion. After you validate your identity, you’ll receive a 10-digit pin code to freeze and unfreeze, or thaw, your credit report as needed. (If you lose it, you can reset your account after jumping through a few hoops.)

Freeze online or by phone:

Equifax, 1-800-349-9960

Experian, 1-888-397-3742

TransUnion, 1-888-909-8872

The freeze generally costs between $10 and $20, depending on where you live, with additional charges any time you cancel or renew your freeze. This can add up for a family, especially if you must unfreeze then refreeze. Freezing your credit report is generally free if you have been the victim of credit card fraud or you were part of an information compromise from a major retailer.

In most states, credit freezes are permanent. In a few places, freezes expire after 7 years.

If you’re looking for something less permanent, look into a fraud alert. A fraud alert lasts 90 days, but can be renewed. You’ll still be able to open new accounts, but companies must verify you’re the one opening it. A freeze, on the other hand, requires you to unfreeze if you hope to apply for a mortgage, for example.

Steps to recovering from identity theft.

If you are a homeowner or long-term renter with no plans to open a new line of credit, make a big purchase or switch jobs, your freeze shouldn’t cause any issues. If, however, you have several life changes coming (say you’re purchasing a vehicle and taking on school loans), canceling the freeze may be your best bet.

If you cancel a freeze, it’s gone. Your credit file is available for inquiries from creditors and lenders. You can also temporarily lift the freeze with a thaw, which allows you to specify a period in which your credit report is available. Note, this can be still present problems if you have multiple inquires coming at different times and it takes time to kick in.                                                                                                     

If you do cancel or thaw your freeze, continue to monitor your financial statements. If you froze your credit because of a breach, you should still update all your accounts with new, secure passwords and monitor your credit report for any strange activity. Read on for more ways to navigate a data breach.

The bottom line: If you’re applying for a loan, renting an apartment, buying a home, purchasing a car or even getting a new job, you’ll need to — at the very least — thaw your credit freeze and it may be in your best interest to cancel it.

Keep Yourself Safe Anytime with Identity Theft Insurance

In the meantime, talk to your Farm Bureau agent about protecting your — and your family’s — identity with identity theft insurance.