There are many things you can do in order to keep your finances safe, but one step that many people are unaware of is the ability to place a credit freeze on all of your accounts. By freezing your credit report, you’re telling the three credit bureaus that you don’t want your personal information sold to any third parties. These include credit card companies, banks, cell phone companies, and utility companies.
By putting one of these credit freezes in place, your making it impossible for anyone to make a credit inquiry. As a result, they cannot issue any new credit in your name. Of course, when you implement a credit freeze, you won’t be able to open any new accounts even when you really want to. As such, you’ll have to jump 
through a few extra hoops whenever you need to open an account or take out a loan. This means you’ll need to weigh the pros and cons first in order to determine if a credit freeze is right for you.
One of the downsides to implementing a security freeze is the fact that there is a fee for each time you do it. The amount of this fee will vary from state to state, but is generally around $10 per credit bureau. This means you will pay a total of roughly $30 each time you need a freeze since you have to request it from all three credit report bureaus simultaneously. If you’ve actually been the victim of victim of identity theft, on the other hand, you can get a freeze at no charge.
When you actually need to open an account or obtain a loan, you’ll actually have to “thaw” the freeze and, unfortunately, spend another $30 to get it removed from the three credit bureaus. Of course, if you want to put the freeze in place again, you’ll have to go through the same process all over again. So, if you’re actively applying for loans or opening new accounts, putting a freeze in place can become prohibitive. If you don’t anticipate applying for a loan or opening any new accounts for some time, however, the peace of mind it can give you might be worth the expense.
In addition to preventing the prospect of identity theft, getting a freeze on your credit reports has another perk as well. If you are an impulse buyer, for example, having a freeze on your credit reports will prevent you from applying for new credit cards that you really don’t need. Not only will it cost you to lift the freeze, it generally takes a few days for the freeze to be lifted so you’ll be forced to think it out before moving forward with another credit application.
If you’re not comfortable with putting a freeze on your account, one of the best tips that you might want to consider is placing a fraud alert on the account instead. A fraud alert is free and it’s simply a note asking that a creditor “flag” your account and contact you by phone before opening new accounts or issuing credit. This method doesn’t protect you quite as well as a freeze, but lenders are legally required to follow through with these flags.
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