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Credit freeze: What to do after a data breach affects your accounts

Some credit card companies waiving fees, offering perks during COVID-19 crisis
Posted at 3:44 PM, Jun 01, 2021
and last updated 2021-06-02 16:07:27-04

SAN DIEGO (KGTV) -- San Diego consumers are looking for greater protections for their personal and financial information in the wake of the Scripps Health data breach. Many people are taking precautions and considering put their credit on ice: a credit freeze.

A credit freeze aims to block anyone from opening new accounts in your name. The catch is that the block applies to legit inquires, too. So it's not a great idea if you're shopping for a home or an auto loan. But when you're not looking to take out any loans or open any lines of credit, it can be a financial lifesaver.

Here's what you need to know about freezing your credit:

What is a credit freeze?

A credit freeze limits who can see your credit report information. The goal is to prevent anyone from opening any new accounts. It doesn't damage your credit or stop your credit report from evolving by your own actions.

Your credit information will still be released to your existing creditors and any debt collectors who may come calling.

But, if you want to open new lines of credit, you'll need to lift the freeze first. This can be done temporarily, either for a set time or for a particular party, like a landlord or lender.

The costs to freeze and lift the freeze on your credit vary based on where you live and for each credit reporting agency, but commonly range from $2 to $10 per agency.

How is it different from fraud alerts or other credit monitoring?

The credit reporting companies do little to make getting a credit freeze easy: you have to ask each of them individually, pay a fee (usually) to put it in place, ask each of them specifically to lift the freeze and often pay another fee. That's because your data is the product that they sell to other people and companies. If you freeze it, it isn't as valuable.

As such, they are more likely to offer you fraud alerts and other credit monitoring products. These are services that will let you know when someone is looking at your credit and may contact you about a new account opened in your name. It's helpful, but it is often after the fact.

Can I still get a credit card or loan?

Sure. When your credit is frozen you can continue to operate your financial life just as you typically would. The only notable thing is that you will need to notify the credit bureaus to lift the freeze before you ask a lender to approve you for credit.

If you are able to determine which credit agency your potential lender is using to run your credit, you can even save yourself some fees by just requesting the freeze to be lifted on that one.

The reporting agencies tell you that this may delay a legitimate credit request.

But for those who don't feel comfortable with the way the credit reporting agencies are handling their treasure trove of personal information, a notification to the agencies and day or so delay may be a fair price to pay for added security.

The agencies advise you to plan ahead and lift a freeze a few days before actually applying for new credit.