Financial Friday: How a credit freeze can protect you from fraudsters

HUNTSVILLE, Ala. (WAFF) - It can be scary to receive a letter stating you were part of a significant data breach. But there are ways you can protect your information. One is checking your credit report to ensure there’s no fraudulent activity. Then, you can take it further by placing a freeze on your credit.

A credit freeze protects your credit from creditors’ access without additional consent. It could protect you from fraudulent credit applications and gives an extra layer of protection from people using your identity to obtain new credit.

WAFF talked to Redstone Federal Credit Union’s April James about scenarios in which you would need to take this more proactive approach:

• You were part of a data breach
• Your financial or personal information was compromised
• You are a victim of identity theft
• You find unfamiliar activity on a credit report
• You want to be proactive in preventing credit fraud
• You are going through a divorce and want to prevent your future ex-spouse from opening new credit in your name.

To freeze your credit, you must contact the three credit bureaus individually, Equifax, Experian, and TransUnion. Placing a credit freeze is free for you and your children, as is lifting it when applying for new credit. James also says a freeze on your credit will not affect your credit score.

James says there are pros and cons of freezing your credit.

The pros are:

• To prevent fraudsters from using your credit
• It’s Free
• It won’t affect your credit score.

However, the cons are:

• It can be inconvenient when you are trying to apply for new credit, and you forget to remove your freeze
• A credit freeze is only a tool. Monitoring your credit at least once a year is essential, and you can do so for free at www.annualcreditreport.com.

Bottom Line: Take advantage of tools and resources to safeguard your information. The last thing you want to do is apply for your new home or car and realize fraud on your credit report. Placing a credit freeze is one of the strongest ways to protect yourself from identity theft, and it’s free!

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