Credit Freeze

[dczech09]

Hi all,

Once I finish paying off my student loans in the next month or two, I will be cutting up my two personal credits cards and closing the accounts. I never use them, so it really is not skin off my back. Also, I don't plan on taking out any loans ever again. My relationship with debt will officially be over

I was also thinking of placing a freeze on my credit report. My only concern is that I do have a company credit card (from my employer) that I have to use to handle business related expenses since I travel frequently.

Would placing a freeze on my credit history harm my use of the company credit card? Does anybody have any experience on this topic? Any input would be appreciated!

[DRILLINDK]

First of all, congratulations on paying off your student loans! I've also considered freezing my credit as well. From what I've read, the credit freeze only prevents someone from opening up new credit in your name. However, it doesn't affect already established credit.

[JoeP]

I've looked into this in the past as well. Most states allow you to freeze for free. You need to contact all 3 credit reporting agencies.

Here is a good overview. Freezing also prevents visibility to your credit report, so if you want an employer or insurance agent or mattress store to see your credit, you'll have to either temporarily or permanently "thaw" it. There may be charges for these actions.

[Wino]

I don't freeze my credit, and I don't ask for credit often, though I did this year (but that's a different story).

From my second-hand understanding, a credit freeze has no effect on current accounts, and only affects future credit if they check your record. Dave Ramsey says that only 30% of credit card issuers actually do a check. I can believe the fact that SOME don't check, because with my credit rating, I should never be offered low limits, which has been done.

So, if you never plan to get a loan again, get the freeze. If your State allows you to do it for free, get the freeze. My domicile is in Texas, and it costs me $30 to get a freeze. I don't see any reason for me to pay that. I'd rather shred cards and letters, deal with identity theft if it happens (less likely with my precautions), and be able to get a loan if I want it.

[snafu]

I don't think it's a good idea to freeze credit, close accounts and cut up all your cards. We never know what challenges life will throw at us and while I don't advocate carrying debt, what aggro would you face if the business CC malfunctioned or went awry while you were away from home?

A couple of years ago while assigned to a Hong Kong business, the largest bank 'ate' DH's ATM card. It took 3 business days to get it back. Grateful DH had a 2nd ATM card from our secondary bank to get HKK dollars from an ATM machine since CCs aren't used much in some countries.

[dczech09]

I don't think it's a good idea to freeze credit, close accounts and cut up all your cards. We never know what challenges life will throw at us and while I don't advocate carrying debt, what aggro would you face if the business CC malfunctioned or went awry while you were away from home?

A couple of years ago while assigned to a Hong Kong business, the largest bank 'ate' DH's ATM card. It took 3 business days to get it back. Grateful DH had a 2nd ATM card from our secondary bank to get HKK dollars from an ATM machine since CCs aren't used much in some countries.

If my business CC malfunctions or somehow I temporarily lose the ability to use it, I purchase whatever I need to purchase myself and get reimbursed. This actually happened before when my business CC got scanned and someone had a counterfeit. We had to close the account and I had to use my debit card for business expenses and then get reimbursed.

Otherwise for personal matters, that is why I have an emergency fun. Like I said, I don't even use the personal credit cards. So I can very easily justify closing those and cutting them up.

My main question is whether or not it is worth it to freeze my credit. Here in WI, it would cost $10, so pretty much nothing. My largest concern is if I were to apply for rent at a new apartment or something and they want to check my credit; but I could always temporarily thaw the credit for something like that.

[Thrif-t]

I put a freeze on our credit, DH & I. It doesn't effect any of our current cards or ability to use them. Like others have said it would only prohibit new cards/loans being opened. I did it because there has been a rash of hackers stealing peoples info and I don't want to go thru the hassle of cleaning up an identity theft. We've made all major purchases, I just don't foresee us getting a loan for anything in the near future. If something does come up we need a loan for, I'll just do a thaw. Not a big deal, and worth the piece of mind for us.

[HappySaver]

Speaking of resurrecting old threads...

This thread fits my question, so I thought I would just add to it.

My state charges $5 for a credit freeze, according to the Experian link posted upstream. I assume that's only for one person, correct? So if my spouse and I both want a freeze, that would be $10, multiplied by 3 (for each of the three credit reporting agencies), which comes out to $30 to freeze our credit.

Is that correct?

If you need to unfreeze it, say, to change cable providers (and they do check credit around here), would you need to unfreeze all three agencies, or just one? That could get expensive.

[Thrif-t]

Speaking of resurrecting old threads...

This thread fits my question, so I thought I would just add to it.

My state charges $5 for a credit freeze, according to the Experian link posted upstream. I assume that's only for one person, correct? So if my spouse and I both want a freeze, that would be $10, multiplied by 3 (for each of the three credit reporting agencies), which comes out to $30 to freeze our credit.

Is that correct?

If you need to unfreeze it, say, to change cable providers (and they do check credit around here), would you need to unfreeze all three agencies, or just one? That could get expensive.

Yep you have to freeze for you and your spouse 30 bucks and unfreeze for both at all 3 if you are opening joint credit so 30 again. If you are only getting credit in one of your names then you'd only have to unfreeze for one of you so the reports could be pulled but you have to unfreeze at all 3 agencies so $15. Clear as mud right?ha

[GrimJack]

I put a freeze on our credit, DH & I. It doesn't effect any of our current cards or ability to use them. Like others have said it would only prohibit new cards/loans being opened. I did it because there has been a rash of hackers stealing peoples info and I don't want to go thru the hassle of cleaning up an identity theft. We've made all major purchases, I just don't foresee us getting a loan for anything in the near future. If something does come up we need a loan for, I'll just do a thaw. Not a big deal, and worth the piece of mind for us.

This is part of my ID theft spiel - "file a miscellaneous or incident report with the police and with the report you can get the 7 year freeze put on your account for free. It does not affect current credit and if you need credit to buy a house or a car or whatever reason, you can get the freeze removed in about 10 days". ID theft is the bane of my existence (and those to whom it has happened); protect yourself.

Another suggestion - go to ssa.gov and set up an account for yourself, once it is set up you can see all the income you have had since you started working although only the best of the last 35 years count. I was ̶s̶u̶c̶h̶ ̶a̶ ̶̶̶s̶̶̶t̶̶̶o̶̶̶n̶̶̶e̶̶̶r̶ so relaxed that I had quite a few holes in my work history; so much so that even now working only 6 months a year my average is still climbing - I am pretty sure that most of the years that had 0 income have fallen off by now.

Interesting Social Security trick - if one spouse is of retirement age and the other isn't, rather than collecting the younger spouse's social security early, collect as a spouse of the older, retired spouse until you fully qualify then collect your SS (unless you make more as a spouse).

[dczech09]

Thanks all! I have done quite a bit of research on the topic since my post. So we are all good!

This is part of my ID theft spiel - "file a miscellaneous or incident report with the police and with the report you can get the 7 year freeze put on your account for free. It does not affect current credit and if you need credit to buy a house or a car or whatever reason, you can get the freeze removed in about 10 days".

I believe what you are referring to is a fraud alert. Not the same as a security freezes. It is very easy to get the two mixed up.

Fraud alerts are issued for free by all three credit bureaus and exist not to freeze your credit, but to add safeguards. They can last for 90 days, 1 year, or 7 years.

Security freezes prevent applications for new credit from being processed (if a credit pull is necessary) as it stops a credit pull in its tracks.

A fraud alert makes it so that lenders who pull your credit must verify additional information to ensure that you are who you say you are when applying for credit. Basically, it adds additional verification requirements. Think of it how like Google (and many other sites) now allow PINs or verification codes as additional safety measures when you sign into an account. For example, when I sign into my gmail on a new computer, Google will send a verification code to my phone and require that I enter it online before I am allowed to enter gmail. Just an additional safety precaution.

Credit bureaus allow fraud alerts so that people who are victims of identity theft (or might be victims) can be extra protected.

Fraud alerts may also allow additional free credit pulls each year, and may also remove your name from credit pre-screening.

[GrimJack]

Thanks all! I have done quite a bit of research on the topic since my post. So we are all good!



I believe what you are referring to is a fraud alert. Not the same as a security freezes. It is very easy to get the two mixed up.

Fraud alerts are issued for free by all three credit bureaus and exist not to freeze your credit, but to add safeguards. They can last for 90 days, 1 year, or 7 years.

Security freezes prevent applications for new credit from being processed (if a credit pull is necessary) as it stops a credit pull in its tracks.

A fraud alert makes it so that lenders who pull your credit must verify additional information to ensure that you are who you say you are when applying for credit. Basically, it adds additional verification requirements. Think of it how like Google (and many other sites) now allow PINs or verification codes as additional safety measures when you sign into an account. For example, when I sign into my gmail on a new computer, Google will send a verification code to my phone and require that I enter it online before I am allowed to enter gmail. Just an additional safety precaution.

Credit bureaus allow fraud alerts so that people who are victims of identity theft (or might be victims) can be extra protected.

Fraud alerts may also allow additional free credit pulls each year, and may also remove your name from credit pre-screening.

The fraud alert is what you get when you are a victim of ID theft - yes but with a police report a credit freeze is something you can ask for and get for free (personal experience from before I worked for the IRS). The fraud alerts last for 90 days; credit freezes are for 5-7 years. Since the credit freeze is not that expensive, you can get it put on your account w/o a police report.

[dczech09]

The fraud alert is what you get when you are a victim of ID theft - yes but with a police report a credit freeze is something you can ask for and get for free (personal experience from before I worked for the IRS). The fraud alerts last for 90 days; credit freezes are for 5-7 years. Since the credit freeze is not that expensive, you can get it put on your account w/o a police report.

Its no big deal, but I believe you are conflating the two. Fraud alerts and credit freezes have distinct differences.

Fraud alerts have three options: 90 days, 1 year, and 7 years. There are some other features that make them great for people who either are victims or may be victims of identity theft.

You may very well be able to get a free credit freeze if you are a victim, which is great! Actually, I verified that this is the case on the FTC website.

However, credit freezes do not last 5 to 7 years. They are on-going until you file a stop. Some states impose a 7 year limit, otherwise they are on-going and are permanently in effect.