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The Costs to Freezing Your Credit Record

by Paul-Martin Foss

In the aftermath of the Equifax breach, many consumers are choosing to freeze their credit reports. But doing so could cost you in more ways than one.

In seven states – Colorado, Indiana, Maine, New Jersey, New York, North Carolina, and South Carolina – you can freeze and unfreeze your credit record for free. In every other state you’ll have to pay to freeze your credit record, and in most states you’ll have to pay again to temporarily unfreeze it. It’s worth noting that Equifax is waiving fees for credit freezes until early October.

The benefit of a credit freeze is that if someone attempts to take out a loan, apply for a credit card, or open a utility account in your name, the lender will reject the application. The downside is that you’ll have to unfreeze your credit record if you want to open a new account, get a loan, or get a new credit card and that will cost you time and money.

If you’re planning to switch phone carriers, buy a house, or regularly engage in transactions that require credit checks, that could get pretty expensive. That’s especially the case if you don’t know which credit bureau your lender deals with, which could require you to unlock your report at all three credit bureaus.

Further, lenders with whom you already have a relationship can continue to access your credit information. So if you have a credit card issued by Bank of America, for instance, a scammer with enough of your personal information could theoretically open another card in your name with the bank and the credit freeze would do nothing to stop them.

That’s not to say that a credit freeze is worthless, but consumers need to assess all the costs and benefits before they make the decision to freeze their credit records.

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