Financial mishaps can happen to any of us. An unexpected job loss, medical bills, or even a poorly managed credit card can lead to a tarnished credit score.
Another risk is the potential for identity theft. If this happens to you, locking your credit (also known as a ‘credit freeze’) won’t improve your credit score, but it can help provide an added layer of protection against theft and fraudulent accounts being opened in your name–which could harm your credit score.
A Look at Credit Worthiness
Having a good credit score comes with numerous benefits–it opens doors to mortgages, loans, and favorable interest rates. Lenders see individuals with high credit scores as reliable borrowers.
Perhaps you are wondering if 690 is a good credit score. While this is an okay number, a more favorable score typically ranges between 700 to 850, based on the FICO score model. The Phenix Group is one of the best credit restoration services that can help you correct erroneous credit information, challenge unfair credit issues, and improve your creditworthiness so that you get this score as high as possible.
Steps to Freeze Your Credit
- Contact the Three Major Credit Bureaus
The credit bureaus Experian, Equifax, and TransUnion each operate independently. Be sure to contact all three bureaus and request a freeze from each one so that you don’t leave your credit vulnerable.
- Provide Personal Information
Credit bureaus require personal information to verify your identity. This will typically include your full name, address, date of birth, and Social Security number. Make sure the information you provide is accurate and up-to-date. Any discrepancies might lead to delays or difficulties in implementing the freeze.
- Set Up a Unique Personal Identification Number (PIN) or Password
A PIN or password will be required when you want to lift the freeze, so choosing one that is hard for others to guess (but easy for you to remember) is essential. Do not share this information with anyone, and consider using a secure method to store it such as a password manager or a secure physical location.
- Wait for the Freeze to be Implemented
Once you’ve submitted the necessary information and set up your PIN or password, the credit bureau will put the freeze into effect. The time frame varies, but it can usually be completed within twenty-four hours.
Why Lock Your Credit?
Freezing your credit is a preventive measure people take to protect their financial identities. Here are some reasons why this might be necessary:
You Have Identity Theft Concerns
If your personal information is compromised in a data breach or you suspect you might be at risk, you can initiate a credit freeze to block potential identity thieves from opening new accounts in their name.
You Don’t Plan to Use Credit
If you are in a stage in your life where you are comfortable with your financial position and no longer feel the need to apply for new credit—perhaps you’ve paid off your mortgage, don’t plan on buying a new car, and are not seeking new credit cards or loans—a credit freeze can further secure your financial profile. This is particularly common among retirees or those nearing retirement.
Fraudsters often target older individuals because they tend to have more assets and higher credit scores. A credit freeze adds an extra layer of protection, making it significantly harder for identity thieves to misuse your credit information.
You Want to Protect a Child’s Credit
If you are a parent or guardian, you can choose to freeze your child’s credit to protect against identity theft. This can ensure your child’s credit remains untouched until they’re old enough to use it.
Cons of Locking Your Credit
If you change your mind and want to apply for credit, you must lift the freeze temporarily. This can take several days, delaying the credit application process. While a credit freeze can prevent thieves from opening new accounts in your name, it doesn’t stop them from committing fraud on your existing accounts. Regularly monitoring these accounts is still essential. Depending on your state’s law and the situation, you might have to pay a fee to freeze or unfreeze your credit.
In Conclusion
The decision to lock or not lock your credit depends on your personal situation. If you believe you’re at high risk for identity theft, the benefits may outweigh the inconvenience. If you frequently apply for new credit, you might prefer to rely on regular credit monitoring to keep your identity safe.
Also, a bad credit score, often resulting from innocent errors or unforeseen circumstances, doesn’t have to become a lifetime burden. The Phenix Group is a reputable credit repair company known for its strict legal compliance and successful track record. We can help you get started with your credit repair journey today!
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