When you apply for a mortgage, the first thing a lender will do is pull your credit report. The report is a valuable tool that gives a lot of information about your finances and it helps determine your interest rate and what programs you are eligible for. With all the data breeches going on, many people have chosen to “freeze” their credit. This means that lenders can’t access your report and slows down the mortgage approval process.
What is a credit freeze? It is just as it sounds – your credit report is frozen, you can’t have new credit issued and no one can access your accounts. If you only freeze one bureau, we will see the other two, but not the one that is frozen. By freezing your credit, it stops people from opening accounts in your name and running up thousands of dollars in bills. If you have had your identity stolen, this is a good option to choose. However, if you are going to make a major purchase or buy a car or new home, you will need to “unfreeze” or thaw your credit report. You are the only one that can do that, typically there is a charge to do it. Depending on where you live, the charge may be $20 to freeze and thaw your report. However, that is a small price to pay if your identity has been stolen.
To put a freeze on your credit report – or to thaw it – you need to call or go online with the credit bureaus. There are three of them and you can freeze one or all three of them.
- Equifax: Call 800-349-9960 or https://www.freeze.equifax.com/Freeze/jsp/SFF_PersonalIDInfo.jsp
- Experian: Call 888‑397‑3742 or https://www.experian.com/freeze/center.html
- TransUnion: Call 888-909-8872 or https://freeze.transunion.com/sf/securityFreeze/landingPage.jsp
If you know you are going to make a major purchase or try to get approved for a mortgage, you will want to make sure the credit freeze is off your report. It can take up to 24 hours to get this done. Another suggestion is to check your credit report – you can check it annually for no charge at http://www.annualcreditreport.com. Some people have the option to view their credit report with their credit cards – more banks are offering this. It’s a great idea to look at your report to make sure there aren’t any accounts you don’t know about – or maybe a higher balance than you expect. Also look for inquiries – that is someone pulling your credit report. It will give you an idea if someone is attempting to open credit in your name that you are not aware of.
A credit freeze is the one way to protect yourself, but remember you need to thaw it so you can make any major purchases. It’s not hard to do, but for some people, it’s easier just to watch their credit report. Both are good options!