MEMPHIS, Tenn. — Putting a credit freeze on your reports at credit reporting agencies is one of the most effective ways to prevent identity theft, particularly after your information has been compromised in a data breach. But few people do it.
ABC24 spoke with Randy Hutchinson from the Better Business Bureau of the Mid-South (BBB) about what people should know.
How a credit freeze works
- A person must contact each of the three credit reporting agencies – Equifax, Experian, and TransUnion – individually to put a freeze on their file.
- A freeze prevents new lenders from accessing the file, which makes it unlikely they'll approve a fraudulent application submitted in someone’s name.
- A person must contact the agencies to have the freeze temporarily lifted if they apply for credit, rent a home, buy insurance, or conduct another transaction which requires checking a credit record.
- There is no cost to freeze and unfreeze credit files.
Why don't more people freeze their credit record?
- Most people are aware they can do it, but less than 30% ever have.
- Many don't know how to do it.
- Having to contact the three credit reporting agencies individually can be a hassle, but the hassle of recovering from identity theft is worse.
- Many people think there's a cost.
- They think it will negatively impact their credit score, which is not the case.
Should more people freeze their credit?
The Identity Theft Resource Center recommends:
- Data breach notices should explicitly recommend a credit freeze.
- Notices should make it clear credit monitoring alone cannot prevent a fraudulent account from being opened.
- The credit reporting agencies should make the process easier, including creating a common system so consumers don't have to contact them individually.