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The newest personal finance trend sweeping social media: Freeze your credit.

A credit freeze refers to blocking access to your credit reports, which are kept by three national credit bureaus — Equifax, Experian, and TransUnion. Since lenders check those reports as part of their approval process, the freeze prevents would-be identity thieves from taking out a loan or opening an account in your name.

But what’s behind it?

For some, it’s fear that the Department of Government Efficiency’s shakeup of government agencies could make consumer databases more vulnerable just as staffing and budgets are shrinking. For others, it’s concern about the increasingly sophisticated phishing emails and imposter scams that surface every tax season. Either way, it’s a good proactive measure whenever you’re worried that private details could get into the wrong hands.

And there’s no real downside: Freezing your credit is free and simple. Here’s how to do it.

•   Contact each of the bureaus separately, either online or over the phone. Here are the online links:
Equifax, Experian, and TransUnion.

•   Follow the prompts to request a freeze.

•   If and when you need your credit reports to be accessible again (when you’re buying a car or house or applying for a credit card, for example,) you must unfreeze them. It takes about an hour, and you can lift the freeze either temporarily or permanently.

You can also place a fraud alert on any of your three credit reports (the bureau you contact is required to tell the other two bureaus, so you only have to do it once.) A fraud alert doesn’t put a freeze on your credit, but it does safeguard you by telling lenders to check with you before opening an account in your name. It lasts for one year.

Another way to protect yourself: Sign up for credit score monitoring so you’ll get alerts about suspicious activity. (For SoFi members, it’s free.)

So what? Identity theft costs billions of dollars each year, and when criminals get their hands on your personal information, it can wreck your credit score and lead to legal problems. Freezing your credit is an easy way to reduce the risk.

Related Reading

•   Freezing Your Credit Files Online: Step-by-step Guide With Screenshots (U.S. PIRG)

•   Top Scams of 2024 (Federal Trade Commission)

•   Credit Freeze vs. Credit Lock: What Is the Difference? (SoFi)

photo credit: iStock/FTiare

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

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