If I had a nickel for every person who has ever questioned my decision to openly share multiple details of my personal finances on this blog — especially considering its eponymous title — I’d be about $3.65 richer right now.
Usually, most people warn me that my openness makes me vulnerable to identity theft. They’re right to express concern. After all, once an identity thief gets hold of your name, social security number, address and date of birth, they’ve essentially got the keys to your credit castle.
Still, I manage to sleep like a baby every night because I have a security freeze on my credit files at the three major credit reporting companies: TransUnion, Experian, and Equifax. By doing so, I’ve essentially made my credit impervious to attack from would-be identity thieves.
You can freeze your credit too by simply going to each of the credit reporting company websites and making an online request.
Unlike a fraud alert — which offers very little consumer protection because lenders and retailers are not legally bound by them — a credit freeze locks up your credit files so that nobody can open up a new account or get a loan in your name. And when I say “nobody,” I mean nobody — not even you.
Another bit of good news is that a credit freeze doesn’t adversely affect your credit score either.
Of course, in exchange for the security that comes with freezing your credit report, you have to be willing to put up with several drawbacks. Here are the ones that cause the most consternation — at least for me:
1. They’re inconvenient. A frozen credit report not only makes it impossible to open up new lines of credit, or take out a loan, but it also prevents you from getting anything else that may require a credit check. This includes things like insurance, utility service, or even a new job. Sometimes it happens for things you’d never expect. For example, earlier this year, I had to temporarily lift my credit freeze for a couple of days in order to renew a security clearance that I need for my job.
2. They (usually) cost money. Depending on your state of residence, each of the three major reporting agencies charge an average fee of $10 to place a security freeze on your credit report, and another $10 each time you choose to temporarily remove it — although identity theft victims can often get the fees waived. So if you expect you’ll need a credit check for any reason in the near future, you may want to think twice before implementing one.
3. They can’t stop thieves from making charges to existing credit card accounts. Nope. An identity thief who manages to get hold of your existing credit card numbers will still be able to charge items to those cards. So keep your paper shredder.
4. They won’t stop pre-approved credit card offers. Unfortunately, if you’re looking to stop junk mail, a credit freeze won’t be able to help you.
In my case, none of these drawbacks outweigh the peace of mind that comes with knowing my credit can’t be hijacked by an identity thief.
Not by a long shot.
Yes, on a couple of occasions it’s been mildly inconvenient, but not so much so that I’ve ever had any regrets.
Photo Credit: William Warby