When to freeze your credit

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As anxiety over the coronavirus pandemic increases, experts have warned Americans to be wary of credit card crooks.

If you are one of the many consumers who are in financial difficulty right now, the last thing you want is for a fraudster to have access to your money. An easy way to protect yourself is to freeze your credit if you know you’re not going to apply for a new card or loan anytime soon.

“Freezing is kind of like putting your credit in a safe and you have the key,” said Jim Droske, president of the credit counseling firm Illinois Credit Services. CNBC Select. “If you don’t need your credit, keep it in the safest place possible until you need it.”

Below, we chat with Droske about why freezing your credit is a good idea for everyone, regardless of your credit score, whether or not there is a global pandemic.

Why Droske Always Keeps His Credit Frozen

“My personal credit has been frozen for years,” Droske, who maintains a perfect credit score, Explain.

Credit freezes take little time to set up, are free, and are a smart way to protect unauthorized access to your credit report. When your credit is frozen, scammers cannot open new accounts in your name, even if they have your personal information. Indeed, no third party can access your credit when it is frozen.

“It’s the safest thing you can do to protect your credit,” says Droske. “I recommend keeping it frozen until you need it. Let’s face it, you know when you’re going to apply for a mortgage, car loan, or credit card, so keep your credit frozen until you are. need it. ” Individuals can still access their credit report when frozen, but they cannot apply for any new credit.

Keep in mind that this does not apply to any bank with which you already have an existing relationship. For example, if you currently have the Freedom Hunt® or Chase Sapphire Preferred® Card and request a credit limit increase, Chase can always look at your credit report to decide whether or not to approve it.

It’s easy to do a ‘temporary lift’ or ‘unfreeze’ your credit

Credit freezes only take 30-45 minutes to set up with all three credit bureaus (Experian, Equifax, and TransUnion) and they’re easy and free to unfreeze when you need them, like when applying for a new mortgage, loan, or other credit. To unlock your credit, call the bureaus or do it on their websites. The process takes place quickly and there should be no extended period of time to wait for the “temporary lift” to be processed.

“I was at a car dealership to buy a car and forgot my credit was frozen,” Droske says. “It took me about two minutes to thaw the reports and the dealership was able to access my credit.

And keep in mind that you don’t always have to unfreeze all three gears when you want to buy something. “You can ask the lender which report they are going to generate, and then ‘unfreeze’ (‘temporarily lift’) that one report,” Droske explains.

Once you’ve released your credit, you can ask how long you want it to be available. For example, you can request that your credit be available for a day, a week or three months. Just make sure you freeze it again after the loan is issued if you want to stay protected.

Whether you have good or bad credit, you should still freeze it

Freezing your credit is important for people with good and less good credit.

“Unfortunately, we live in a world where scammers are lurking, data breaches are rampant and a ton of our information is available,” Droske said. “Why not take control of it?” If you have good credit, why bother? Freeze it. “

But if you are someone with below average credit, you might not be as worried about a scammer using your credit as it would be more difficult to get loan approvals. Even so, you might still want to think about freezing it.

When you are offered credit extensions that do not have favorable terms or you are prone to impulse purchases, freezing your credit helps control this. In these scenarios, if your credit is not as easily accessible for you, you are better protected to follow through on these decisions.

“Remember, you can always unfreeze your credit and complete the application, but when you need to take an extra step to do so, you can rethink the terms and even the purchase itself,” Droske explains.

Be aware that a credit freeze does not impact your credit score and that you can still use your credit cards normally if your credit is frozen.

At the end of the line

If you’re worried about fraudsters gaining access to your credit, freeze it. You can always lift it to apply for new credit and then freeze it again.

Droske recommends that everyone give it a try, regardless of your current credit situation. The only exception would be if you are someone who is trying to rebuild or establish credit and know that you will be applying soon.

“It’s a small downside with little effort and zero cost, but high levels of protection,” Droske explains. “I sleep better knowing that no unauthorized third party can access my credit until I say so.”

Information about the Chase Freedom® was independently collected by CNBC and was not reviewed or provided by the card issuer prior to publication.

Editorial note: Any opinions, analysis, criticism or recommendations expressed in this article are the sole responsibility of the editorial staff of Select and have not been reviewed, endorsed or otherwise approved by any third party.

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