When you put a credit freeze or security freeze in place on your file at the three major credit reporting agencies, no one will be permitted access to your credit reports, even if they have your Social Security number. This will stop prospective thieves from opening an account in your name.
The big drawback is that it will also stop you from opening an account in your own name.
For some people, that may not be a problem, though. For example, if you’ve already got your home, with the attendant utility accounts, and all the credit cards you need, you might not have reason to open any new accounts. If that’s the case, a freeze could offer an extra layer of protection.
You can also lift a freeze — say if you need financing for a new car — and then restore it after you’ve secured a loan.
Another drawback: Placing a credit freeze is generally not free. Costs vary by state. Equifax has a handy chart with state-by-state details.
The Consumer Financial Protection Bureau’s website has links to each of the three reporting agencies’ information about putting a freeze into effect. The Federal Trade Commission’s site has general information about freezes.
Have you ever placed a freeze on your credit, and was it worthwhile? Tell us about it in comments below or on our Facebook page.