Consumers to benefit from new credit freeze rules

September 19, 2018

Many of us have been victims to identity theft, but now more than ever you can fight against those trying to take what is yours. Consumers will soon have a new free tool to help protect themselves against scammers who would steal their financial information.

The three nationwide credit reporting agencies in the U.S. (Experian, Equifax, and TransUnion) will be required by a new law to allow consumers to “freeze” and “thaw” their credit report for free.

The new law, called The Economic Growth, Regulatory Relief, and Consumer Protection Act, will go into effect on Sept. 21, 2018. This law does many things but the one most consequential to most consumers is that it changes the rules regarding credit freezes.

Currently, freezing your credit is governed by the state. In the state of Idaho it has cost $18 to freeze your credit and another $18 to unthaw it, and this would have to be done with each credit agency so the cost could really add up. The number of situations requiring a credit check — upgrading your cell phone, applying for a job, signing a new lease, etc. — makes freezing and unfreezing your credit inefficient.

As a result, many people won’t bother with a freeze unless they believe they are specifically at risk for identity theft.

When the new law goes into effect, freezing and unfreezing your credit will be simpler and free. You will still have to do so at each of the three credit bureaus, but they will have online portals that will make the process much simpler.

When a credit reporting agency receives an online or phone request to freeze someone’s credit, they have to freeze it within one day. Requests to unfreeze someone’s credit report must be completed within one hour. This makes it much easier to keep your credit frozen and then only unfreeze when you need to apply for new credit as the changes are free and can be done quickly and easily online.

A security freeze prevents the credit reporting agency from releasing your credit report while it’s in effect. Consumers are given a PIN or password that they must have in order to later thaw their credit report so it can be released again. You can read more about credit freezes (as well as locks and alerts) here.

The new law also allows any parent to freeze their child’s credit. A child’s credit report is especially valuable since it is clean and often not monitored regularly. For parents this can be a huge relief in knowing once frozen your child’s credit is safe, instead of being surprised by a breach when you weren’t expecting it.

Finally, the new law extends initial fraud alerts on your credit report from 90 days to 1 year, and allows victims of identity theft to place a fraud alert on their credit reports for 7 years. Over the next year, the credit reporting agencies are also required to provide free credit monitoring services to all active duty military personnel.

Jeremy Johnson is the Eastern Idaho Marketplace Manager for the Better Business Bureau Northwest + Pacific. Contact the BBB at 208-342-4649 or email to info@thebbb.org.

Update hourly