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SALT LAKE CITY — More and more consumer advocates are pushing consumers to freeze their credit, even before they're hit by identity thieves. But some credit experts believe a freeze might not be the best option for many of us.
A credit freeze puts you in direct control of who has access to your credit. For anyone — even you — to open a new account with your identity, the freeze has to be thawed.
"Everybody wants maximum control over these instruments that contain so much information about their personal, financial lives," said Randy Padawer. Padawer is the consumer education specialist for credit repair firm Lexington Law Firm. "Sounds like that's the way to go."
Credit freezes have been slowly but increasingly adopted as a way to go. Between 2011 and 2014, only about 160,000 people asked credit bureau Experian to freeze their credit, according to Credit.com. But, after a series of high-profile data breaches, that number nearly tripled in 2015 alone.
And now, the Public Interest Research Group recommends them — even if your identity has not been stolen.
"Why would you only want to detect a new account being opened in your name when there's a way to prevent it from happening in the first place," said Mike Litt of the U.S. PIRG.
But Padawer isn't convinced a freeze is for everyone trying to prevent identity theft.
"You could cause yourself some serious difficulties in addition to the expense by deciding the way to avoid identity theft is to just freeze all your information," said Padawer. "To what extent do we need to become barricaded for protection? It's a trade-off."
Freezes and thaws cost identity theft victims in Utah nothing. But others must pay $10 for an initial freeze, then pay another $10 each time a thaw is needed. And that's per credit bureau.
"You've got to lock and unlock all three," Padawer said of the three leading credit bureaus Experian, Transunion and Equifax.
So, Pedawar said it could cost you up to $60 each time you apply for a loan, credit card or a job or try to buy insurance or rent an apartment or even to set up utilities. Besides costs, there could be infuriating delays and hassles.
"People need to understand that whole credit freezes are probably more than the doctor ordered," said Padawer. "It's almost like a tourniquet. Sure enough, it will prevent all bleeding. But do you really want to apply a tourniquet, almost routinely?"
Padawer says a credit freeze could be exactly what the doctor ordered — once you are a victim of identity theft, or at least suspect you are. They'll greatly reduce the risk of impostors opening new accounts in your name.
But as preventive tool, basic credit monitoring or fraud alerts may be better options. Fraud alerts are free and keep your credit file accessible at the three credit bureaus. But it requires creditors to take steps in verifying your identity.
Padawer also says a freeze could be a good option for seniors, or people who don't need regular access to their credit.
Contributing: Debbie Dujanovic
