Wednesday, August 15, 2018
What you should know about free credit freezes
Dupaco member Damian Janisch reads to his son, Xzavier, in their Dickeyville, Wis., home. Thanks to swift action by his financial cooperative, Janisch’s money—and his Dupaco accounts—were secured when he became a victim of identity theft. (S. Gassman photo) Read more >
A new federal law, which takes effect Sept. 21, will allow you to get free credit freezes for yourself and your children, and year-long fraud alerts, according to the Federal Trade Commission.
Currently, you can be charged fees to freeze and unfreeze your credit, depending on which state you reside.
“It’s been a costly, drawn-out expense for consumers, who have had to pay fee after fee just for their peace of mind,” says Cindy Hilkin, consumer lending consultant supervisor at Dupaco Community Credit Union. “When it comes to identity theft and protecting the consumer, this new law is going to be huge.”
How credit freezes work
Freezing your credit prevents creditors from accessing your credit report—making it more difficult for fraudsters to open new credit, loans and services in your name.
Credit freezes don’t affect your current credit and loan accounts.
You must place credit freezes with each of the three major credit reporting companies—Equifax, Experian and TransUnion. Typically, you’re assigned a PIN that allows you to freeze and unfreeze your credit as needed.
Child credit freezes
Thanks to the new law, you’ll also be able to freeze your children’s credit until they are old enough to use it.
Prior to this law, not all states have allowed parents to do so. And some states have charged fees for this service.
“You always want to make sure your children are protected for their future,” Hilkin says. “Social Security Numbers are still being stolen and misused, so I would have no hesitation about freezing my child’s credit.”
What to remember
A credit freeze can create hurdles when you need to apply for new credit.
The freeze remains active until you remove it, so it’s important to plan ahead by unfreezing your credit before applying for any new credit or loans.
Under the new law, you’ll also be able to sign up for year-long fraud alerts. With fraud alerts, businesses must verify your identity before issuing credit. The law extends the current 90-day alert period.
Credit freezes and fraud alerts should not take the place of regularly monitoring your credit, Hilkin cautions. Continue to keep tabs on your credit and watch for suspicious activity through services such as Dupaco’s free Bright Track credit monitoring service.
“Freezing your credit won’t stop all identity theft, but it will be a huge deterrent,” Hilkin says.
By Emily Kittle