Credit freezes are now free. Here’s why you might want one. Many experts agree that freezing your credit report is the strongest way to protect against identity theft.
Starting Friday, you’ll be able to do it free of charge. In the wake of a massive data breach last year at Equifax that exposed personal information for about 148 million Americans, Congress amended the Fair Credit Reporting Act to require reporting agencies to freeze reports for no charge. Equifax is one of the three major credit reporting agencies in the United States.
Identity thieves can use information in your credit report to open credit cards and bank accounts, and take out loans. But a credit freeze restricts your credit report so that it can’t be accessed by a new lender. If a lender can’t see your credit report, they won’t issue a new account in your name. Credit card companies and banks where you have existing accounts will still be able to check your credit report. But you will have to temporarily lift the freeze if you want to open a new line of credit. Before Friday, both freezing and unfreezing could cost money. Most security freezes cost between $2 and $10.
Some states had already required credit agencies to lift the charge, but the new law makes placing, lifting, and permanently removing freezes free no matter where you live.
A credit rating agency nowmust put the freeze in place within one business day if made online or over the phone, and within three business days if requested by mail. It has one hour after you request a lift on the freeze, though it could take just minutes, according to consumer advocacy group US PIRG.