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Few Consumers Take Advantage of Credit Freezing

Few Consumers Take Advantage of Credit Freezing
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If you’re not sure why or when your credit was frozen, you’re not alone.

While more than three-quarters of consumers said they are aware of the credit freeze process, 71% have not used this crime prevention tool, according to a recent survey published by the Identity Theft Resource Center (ITRC). The biggest reason consumers report not having their credit frozen is because they don’t think it’s necessary. To a lesser degree, some respondents (11%) avoided putting their credit on ice because they mistakenly believed it would affect their credit score or that they would have to pay to freeze or unlock their credit.

The survey found that of the 73% of consumers who believed their personal information had been affected by a data breach, only 3% had their credit frozen after receiving a data breach notification.

“A credit freeze is generally the most effective tool to prevent new accounts from being opened in your name,” said Eva Velasquez, President and CEO of ITRC, in a press release announcing the survey results. The survey was conducted online last summer and covered 1,050 adult consumers in the United States.

Here’s what you should know about freezing your balance:

What is a credit freeze?

Freezing your credit stops access to your credit report, so bad actors won’t be able to open a new credit account in your name. It’s completely free.

This process also prevents you from opening new accounts. But don’t worry if you want to apply for a new rewards credit card or any other type of credit — you can temporarily lift the freeze to do so, the Federal Trade Commission explains.

When should your credit be frozen?

Hackers just won’t quit. By the end of September, the number of publicly reported waivers in the US exceeded the total number of settlements in 2020 by 17%, according to ITRC.

By now, you may be aware of the notifications companies send when they are hacked, such as the note that popular trading app Robinhood sent to users last month when emails or full names of millions of people were exposed, about 310 people were exposed. Date of birth and zip codes exposed in a data breach.

If you’ve been notified that your data has been compromised – or if you lose your wallet – it’s a good idea to protect your information by freezing your credit so that criminals can’t use the stolen information to open a new account in your name.

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How to freeze your credit

You can implement a credit freeze by contacting the three major credit bureaus: Equifax, Experian, and TransUnion. The FTC has contact information for each office here.

Money also has a complete guide to your credit freeze, and how to determine if it makes sense for you.

More money:

How to freeze your credit

2021 is fast paced to break the record for most data breaches ever

What happens to my personal information after a data breach?

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