Should You Freeze Your Credit Report

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In recent years, identity theft has become more prevalent than ever. A credit freeze is a process of putting a lock on your credit report so that no one can open or access new lines of credit under your name, including you. The three major credit bureaus typically contacted are:

  1. Experian®
  2. Equifax®
  3. TransUnion®

The three credit bureaus must be contacted individually to make the request. Doing so doesn’t impact the credit score itself, so it’s still possible to improve your numbers as well as your chances of getting loans in the future. However, any step that impacts your finances should be carefully weighed.

Here are five reasons one might consider freezing their credit reports:

1. To Minimize the Risk of Identity Theft

Perhaps the main reason to freeze your credit reports is to protect against the rising threat of identity theft. Cybercriminals are taking advantage of new technologies and security loopholes to gain unauthorized access to people’s sensitive financial information. One way to safeguard yourself from potential identity theft is to freeze your credit report.

In today’s digital age, freezing one’s credit reports can minimize the risk of identity theft or fraud. When your credit report is frozen, no one can open new accounts using your name or personal information. This way, any third party attempting to access your credit or banking information will be denied.

2. To Prevent Fraudulent Credit Card Transactions

Credit card and other financial transactions can occur in various ways, including

  • Swiping the credit card
  • Making online purchases
  • Making purchases digitally on social media
  • Placing orders over the phone

All of these types of transactions can potentially expose people to greater risks of identity theft. A credit freeze makes it easier to avoid fraudulent transactions that may negatively impact your finances.

3. To Protect Your Credit Score – and Possibly Your Financial Future

Maintaining a good credit score is crucial for obtaining loans, credit cards, and other financial products at favorable interest rates. So, when someone fraudulently opens a new account and applies for loans, that can impact the victim’s credit score in a negative way. By freezing your credit report, you may be protecting your credit score – and therefore your financial reputation – from unauthorized individuals or entities that could negatively impact your financial future.

4. Easy to Freeze and Unfreeze Your Credit Report

Freezing or unfreezing your credit report is a simple process that you can do easily. By going online or making a phone call, you can freeze your credit report within minutes. Some credit reporting agencies even provide apps, making it more convenient to manage credit freezes and unfreezes.

5. Freezing Credit Reports Is Free

Freezing credit reports is considered a security measure that is provided by credit reporting agencies and mandated by law. You don’t need to pay anything to freeze your credit report once and for all. This is an example of practicing good financial habits that won’t cost you a dime and might give you greater peace of mind.

Potential Downsides to Freezing Your Credit Report

Freezing one’s credit report can lull a person into a false sense of security. Doing so doesn’t necessarily protect you from credit fraud or other forms of online and financial fraud. Someone who has your Social Security number might still attempt to steal your identity.

Additionally, freezing one’s credit report doesn’t typically have any impact on a person’s existing financial accounts, or improve their score. In other words, if someone finds a way to steal sensitive personal information from one of their accounts, the thief may still find a way to use their credit without their permission.

Use Secure, Protected Financial Services at CFSC Currency Exchanges

The subject of credit is complicated. Your best bet is to do a bit of online research about what freezing your credit reports could mean for your own financial future. Meanwhile, focus on practicing good financial behavior. For example, let your neighborhood Community Financial Service Centers (CFSCs) help you handle a wide range of financial and auto-related transactions, all under one roof.

All of our services are safe, secure and digitally protected! To name a few:

At CFSC, we understand our customers’ need to protect their finances. To set up a prepaid debit card or take advantage of our many auto and financial services, find the nearest CFSC location and stop on by!

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