Tips on how (and why) to freeze your credit report at all 3 bureaus

Let’s say you’ve received notifications about your business credit activity or your business has recently been the victim of identity fraud. In either case – or if either happens to you personally – freezing your credit may be a simple way to protect your credit file. In this article, you’ll learn tips on how to freeze your credit report through Equifax®, Experian®, and TransUnion®.

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What is a credit freeze?

Also known as a security freeze, a credit freeze typically blocks access to your credit report so nobody can view it.

In 2018, a federal law went into effect requiring all of the three credit bureaus to offer credit freezing for free. A credit freeze doesn’t generally affect your personal or business credit score.

There are a few steps you’ll likely need to take to freeze your credit. Fortunately, the process is typically quick and free.

1. Contact the credit bureaus

To start the process of freezing your credit, you’ll likely need to contact the bureaus that hold your credit report. There are three main credit bureaus that provide free credit reports: Equifax, Experian, and TransUnion. On each of these bureaus’ websites, you’ll generally find instructions for setting up a credit freeze. You can typically initiate your credit freeze online, over the phone, or through a mail-in request.

2. Provide your information

Whether you’re requesting a credit freeze online, by phone, or via mail, you’ll typically need to provide personal information like your first and last name, date of birth, Social Security number, and the addresses where you’ve lived over the past two years.

3. Verify your identity

You’ll generally need to verify your identity before a credit bureau initiates a credit freeze. This step typically involves providing a bureau with certain information that it will use to ensure you’re the real owner of your account. Once you’ve verified your identity, the credit bureau generally has one day to freeze your credit. If you submitted a mail-in request, the bureau typically has up to three business days to implement the freeze.

4. Receive a PIN to unfreeze or refreeze your credit report

Once you verify your identity, you’ll likely receive a PIN number which you can use unique number to lift the freeze on your credit report or refreeze it, if need be.

If you requested a freeze through your online account, you likely won’t get a PIN number. Instead, you can generally log into your account and unfreeze or refreeze your report. Experian is the exception, requiring you to use a PIN for online actions.

When should you freeze your credit report?

Here are some reasons you may consider freezing your credit:

  • You’ve been the victim of identity theft

If someone has stolen your identity, freezing your credit may keep unwanted parties from opening credit cards or business lines of credit in your name. With a credit freeze in place, lenders and credit card companies likely won’t be able to access your credit report and grant an imposter’s request. That means identity thieves generally won’t be able to do much with their access to your information.

  • You’ve received unexplained bills or collection notices

If someone is using your personal or business information or credit card, you may start receiving bills for purchases you didn’t make. You may also start seeing collection notices for debts you didn’t incur. Either way, placing a freeze on your credit may help stop someone from making new accounts with your information.

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  • You see new inquiries or credit accounts on your credit report

Seeing credit inquiries on your personal or business reports that you didn’t initiate may signal a case of identity theft. As you work to investigate the issue, you might want to freeze your credit. This way, if someone is applying for credit with your information, a lender likely won’t be able to complete the request.

  • Your bank or credit union notifies you about fraudulent activity

If you get a direct notification from your bank or credit union about fraudulent activity on your account, a freeze may be an easy way to prevent credit damage. With a freeze in place, typically nobody can access your credit reports, so someone posing as you or your business likely can’t open any new accounts.

  • You’ve been part of a data breach

If your Social Security number, employer identification number (EIN), or other personal identification was exposed in a data breach, freezing your credit is likely crucial. It’s how you can help prevent anyone from using your information to open new accounts.

A credit freeze doesn’t prevent someone from using your information in other ways. But it typically does act as a safety mechanism against fraudulent credit accounts made in your name – and that’s a start.

Are there any downsides to freezing your credit?

While there may be several reasons you might want to place a freeze on your credit, below are a few drawbacks to consider.

1. You’ll likely need to contact each credit bureau

Your time is valuable, and contacting all three credit bureaus to freeze your account may take time. In the same way, if you want to temporarily unfreeze your account to allow a credit check, you’ll likely need to contact all three credit bureau’s again.

2. It may delay situations requiring credit checks

You’ll need to remember to temporarily unfreeze your credit if you’re applying for loans or otherwise pursuing business needs that depend on your credit. Services that require credit checks may include commercial landlords, credit card issuers, business insurance providers, and some utility companies.

3. It likely won’t protect you if your accounts are already compromised

If a scammer has already created accounts in your or your business’s name, a credit freeze likely won’t keep the scammer from using these accounts. In that case, placing a freeze on your credit typically only prevents someone from doing even more damage. You’ll generally still need to call card issuers to shut down any cards falsely created in your name and dispute any purchases you didn’t make.

Securing your credit file

Freezing your credit reports may help keep unwanted parties from opening new credit lines in your or your business’s name. While it might not be the most convenient process, placing a freeze on your credit is typically free and straightforward. It’s generally a great way to keep your credit report in shape before you apply for small business funding. Just remember to unfreeze your credit file once you’re ready to apply.

All set to start exploring your loan options? SmartBiz® can help to connect you with SBA 7(a) loans, bank term loans, and custom financing. Check now whether you pre-qualify*.

*We conduct a soft credit pull that will not affect your credit score. However, in processing your loan application, the lenders with whom we work will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and happens after your application is in the funding process and matched with a lender who is likely to fund your loan.

WHAT YOU NEED TO KNOW: The SmartBiz® Small Business Blog and other related communications from SmartBiz Loans® are intended to provide general information on relevant topics for managing small businesses. Be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed. Please consult legal and financial processionals for further information.

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