Avoid These 4 Pitfalls When Unfreezing Your Credit

If you froze your credit in the wake of the Equifax data breach nearly a year ago, give yourself an A+ for being a prudent consumer (If you haven’t yet, here’s how you can, and why you should do it now.  As of Sept 21, 2018, freezing your credit is now free too!). As the one-year anniversary of Equifax’s careless handling of personal information approaches, and with companies continuing to get hacked, restricting access to your credit reports has never been more important.

The breach was a reminder that identity thieves can use credit reports to maliciously rack up thousands of dollars in unpaid bills in your name. But you can’t freeze your credit always and forever. Your credit reports also unlock mortgages, credit cards, auto loans, and other forms of, well credit. So there’ll be times when you need to unfreeze your own credit for legitimate purposes.

 Identity thieves can use credit reports to maliciously rack up thousands of dollars in unpaid bills in your name

Identity thieves can use credit reports to maliciously rack up thousands of dollars in unpaid bills in your name

In other words, restricting access to your credit isn’t a one-time process. You’ll need to grant lenders the ability to review your report when you apply for a a credit card, auto loan, or home loan, or—as I learned last year—when you apply for Apple’s Upgrade Program.

Here are four lessons from my experience unfreezing my credit when needed that can make the process as painless as possible for you:

1) Don’t Lose Your PIN

When you freeze your credit, you’ll receive a 10-digit PIN that you’ll need anytime you want to unfreeze your report. If you have this PIN, the process is usually seamless and you can lift a freeze in less than 15 minutes either online or by phone. For example, when I had to unfreeze my credit to get the iPhone X, it took me less five minutes on each credit bureau’s website.

But if you lose your PIN, things get much more complicated and time-consuming. Credit bureaus may require you to make your request in writing (yes – snail mail) and include proof of identification such as a photocopy of your driver’s license or passport. If you’re on a deadline, this wait can be excruciating.

 Unfreezing your credit can be a painless process and an important step to protecting your credit

Unfreezing your credit can be a painless process and an important step to protecting your credit

Whether it’s writing down the PIN and storing it at home in a safe or securely storing the PIN in the cloud, make sure you stay organized!

2) Don’t Permanently Unfreeze Your Credit

When you go to a credit bureau’s website, you’ll have the option of unfreezing your account permanently or thawing it, which means unfreezing it only temporarily. My advice: Thaw your account and select the minimum time frame to allow legitimate creditors to access your reports.

To keep with the Apple example, I chose a 24-hour timeframe to unfreeze my credit—knowing that I was heading straight back to the Apple store and that Citizen’s Bank would pull my credit right away for the iPhone upgrade program.

 Only unfreeze your credit temporarily and for the shortest time needed for authorized lenders to access it.

Only unfreeze your credit temporarily and for the shortest time needed for authorized lenders to access it.

However, you won’t always be able to predict exactly when the lender will reach out to the credit bureau, such as when you submit an application to rent an apartment that requires a credit check. In these cases, you may need to thaw your account for a longer window to accommodate for a potential lag.

Permanently unfreezing your accounts will make you susceptible to identity theft again, so you’ll always want to refreeze them once you’ve allowed access to legitimate queries. Setting a thaw is the equivalent to automating that process instead of putting the onus on yourself to remember to freeze them again in a few days or weeks.

3) Don’t Fall for the Credit Bureau’s Lock/Unlock Option

Credit agencies have been steering consumers to lock their credit instead of freezing it, touting it a quick and convenient alternative.

 Don’t fall for the credit lock. Stick with the safer and clearer freeze/unfreeze option

Don’t fall for the credit lock. Stick with the safer and clearer freeze/unfreeze option

When I unfroze my credit with TransUnion last December, the receipt included this post script: “With TransUnion Credit Monitoring, you can lock and unlock your TransUnion & Equifax credit reports. It’s like a freeze, but you have much more control since you can lock and unlock online.” Ironically, I’d just unfroze my credit with them online.
What the bureaus don’t tell you is that locking your credit is an arbitrary feature that they created, one that isn’t regulated by states or the federal government. Credit freezes, on the other hand, are regulated, which means there are processes and procedures in place to protect consumers.

As Consumer Reports puts it: “In most cases a credit freeze offers better protections against fraud and can be cheaper, making it the best option.”

Chi Chi Wu of the National Consumer Law Center agrees. “Because security freezes are covered by state law, if something goes wrong—for example, if credit accounts are fraudulently accessed anyway—consumers will be protected from any financial liability,” she explains. “With locks it’s not clear who would be liable.”

So don’t fall for the credit lock. Stick with the safer and clearer freeze/unfreeze option.

 One the most important steps you should take to prevent identity thieves from opening a new line of credit in your name

One the most important steps you should take to prevent identity thieves from opening a new line of credit in your name

4) Don’t Unfreeze More Accounts Than You Need To

If you know which credit bureau—Equifax, Experian, Transunion—a lender is using, only unfreeze your credit at that particular bureau. Not only is this less work for you, but it also reduces the probability that someone will pounce on one of your unfrozen accounts.

Sadly, companies won’t always be willing or able to share this information. When I was at the Apple store, the representative helping me had no clue which credit bureau Citizen’s Bank would use and a quick Google search didn’t point to a clear answer. It would have been easier if I could have thawed my credit at one bureau.

It won’t always be possible, but it’s worth checking. The bottom line is that the fewer accounts you unfreeze, the better.

With data breaches becoming the new normal in today’s digital age, taking control of your credit will help stem the potential damage of your information falling into the wrong hands.  It’s a small step that can save you thousands of dollars and hours.

How was your experience unfreezing your credit? Did you run into any problems? Tell me about it!