Only 1% of Americans Use This Simple Tool to Protect Their Identities

credit freeze
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Honest Abe

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Some of the links in this post are from our sponsors. We’re letting you know because it’s what Honest Abe would do. After all, he is on our favorite coin.

Hide your PINs; hide your SSNs.

We know, we know. Identity theft is a big issue.

Last year, billions of identities were exposed and millions were stolen.

Don’t throw your hands up in imminent defeat. You can start protecting yourself by keeping tabs on your credit score.

But there’s one preventive tool out there that’ll protect you from the start — one that you’re probably not utilizing.

That’s what I’m going to talk about today.

It’s called a credit freeze.

Credit Freeze, Defined

According to a recent Credit Sesame analysis of nearly 4 million consumers, less than 1% of adults have credit freezes on their credit files.

Why? Credit Sesame hypothesized, “most people don’t know how fast and simple it is to protect their credit with credit freezes.”

And perhaps many aren’t even familiar with the tool.

So let’s start.

Credit Sesame defines a credit freeze most eloquently: “a process which locks down your credit file and prevents identity thieves and cyber criminals from opening credit in your name.”

In short, the tool freezes your credit file, so no one can gain access to that information — except you.

In order to access your credit later — which you’ll need to do to open a bank account, sign up for a credit card or take out a mortgage, for example — you’ll have to unfreeze, or thaw, it.

And no, it won’t negatively affect your score.

When You Should Freeze Your Credit, According to an Expert

Many people freeze their credit after their identities have been stolen.

That’s an OK start.

However, you’re basically in a race against the criminal. Who can get to the credit report first?

Steven Weisman, a Bentley University professor and author of fraud and identity theft blog Scamicide, suggests freezing your credit now — and always.

He thinks of the tool as a “preventative medicine.”

“This is the single best thing someone can do to protect themselves from being a victim of identity theft,” he says. “Even if your Social Security number was in the hands of an identity thief, you’d still be protected.”

A credit freeze is different than any sort of fraud alert, which a credit bureau might suggest using after your identity has already been compromised.

When you set up a fraud alert, “no one is supposed to give credit in your name without checking with you first to make sure that it is you and not an identity thief,” Weisman explains.

However, consumers often ignore these alerts — and even companies will ignore them when checking your credit report and issuing a credit card, for example.

Weisman likens these alerts to getting hit by a truck — then having a passerby say, “Hey, you got hit by a truck.”

At that point, it’s kind of too late.

On the other hand, a credit freeze allows that passerby to say, “Hey! You’re about to get hit! I gotcha!”

You’re protected.

Here’s How to Freeze Your Credit — and Unfreeze It

Depending on which state you live in, freezing your credit after becoming an identity theft victim is free.

If you just want to freeze your credit as a preventive measure, you’re probably going to have to pay a small fee — but typically nothing over $20.

You’ll have to contact each of the three credit bureaus to make this happen.

Here’s where you can find more information for each bureau:

You can activate a credit freeze online (or by phone or mail) by providing your information. The credit bureau will then give you a special PIN, which you’ll need when you unfreeze — or thaw — your credit.

You’ll have to do that when you need access to your credit report for any number of reasons. That process typically takes a few hours, Weisman says, though the bureaus warn it could take up to three days.

“This will cause delays — but only of a few hours,” he says. “It stops from impulse buying, I guess. But do you impulse buy a mortgage? Not really.”

It’ll also require a small fee, but it’s nothing crazy.

In Weisman’s opinion, credit freezes are “a tremendous tool. The charge is minimal compared to the benefit.”

Carson Kohler (@CarsonKohler) is a junior writer at The Penny Hoarder. She hates winter, but she wouldn’t mind freezing her credit.

Honest Abe

Disclosure:

Some of the links in this post are from our sponsors. We’re letting you know because it’s what Honest Abe would do. After all, he is on our favorite coin.