Over the last decade, we have seen far too many data breaches put consumer information at risk. That most recent debacle was the Equifax data breach of 2017, which released the sensitive personal information of up to 143 million Americans to hackers and thieves.

According to Equifax, the breach lasted from mid-May through July of last year. During that time, hackers accessed Social Security numbers, birth dates, addresses, and even driver’s license numbers in some cases. They also stole approximately 209,000 credit card numbers and important documents with identifying information from 182,000 people.

If that’s not enough to make you worry about identity theft, perhaps nothing will. Fortunately, there is something you can do to protect your personal information, credit information, and identity from hackers. You can freeze your credit, and thanks to a new law, doing so is free.

How a security freeze works

When you go to apply for new credit, lenders access your credit report from the credit bureaus to assess your credit worthiness. When you place a security freeze on your credit report, however, lenders are rendered unable to access your credit report or your credit score unless you’ve given specific permission for them to do so.

The main goal of a credit freeze is ensuring identity thieves cannot open new accounts in your name. With that in mind, these security freezes allow you to create a PIN number you can use to temporarily unfreeze your credit report if you need to apply for credit — for example, if you needed to apply for a home loan or car loan.

The good news about security freezes is that they do not impact your existing lines of credit. Even if you freeze your credit with the credit bureaus, you will be able to continue using open lines of credit and credit cards as normal. It’s also important to note that freezing your credit report has no impact on your credit score — the three-digit number that denotes your credit health.

However, a security freeze isn’t an end-all-be-all solution since creditors and lenders you already have accounts with can access your report and score without a PIN number. Some government agencies, including some law enforcement agencies, can also access your credit details during a freeze.

Why should you freeze your credit?

While you may not feel you are at threat for identity theft or other hacking methods, you may want to freeze your credit anyway. Doing so ensures that nobody can open an account and borrow money in your name. Not only can preventing this type of theft save you from financial consequences that result from identity theft, but it can save you from the stress it causes as well.

All adults should consider freezing their credit, but you consider the prospect even further if:

  • Your credit card details have been stolen in the past.
  • You are a past victim of identity theft.
  • You don’t plan to apply for new credit.
  • You prefer to prevent identity theft before it happens.

How to freeze your credit

While consumers have been able to freeze and unfreeze their credit reports before now, they typically had to pay between $3 and $12 per credit bureau to do so. These costs may not seem substantial, but they are exacerbated by the fact that consumers are required to freeze their credit with all three of the major credit bureaus — Experian, Equifax, and TransUnion.

Fortunately, a new federal law dictates that people can freeze and unfreeze their credit at the three major credit bureaus with no charge starting September 21, 2018. The new law also extends fraud alerts made on your account from 90 days to one year.

If you opt to freeze your credit, here are the steps you’ll have to take:

Step 1: Visit each individual credit bureau to search for a link to their “security freeze” page.

You can also access the security freeze pages here:

Step 2: Enter personal information such as your name, address, previous addresses, Social Security number, and birth date. Answer any personal questions they ask about your background, including confirming information on previous loans and addresses.

Step 3: Say “yes” to the security freeze option and select a PIN number. Also make sure to write down your PIN number for safe keeping in case you forget. Make sure to keep your PIN number in a safe place that is not accessible by others.

Note: While the steps above may lead to a successful credit freeze, it’s possible you’ll need to mail in additional identifying information such as a bill with your name and address on it or a copy of your driver’s license.

Pros and cons to consider

While freezing your credit can protect you from having your identity stolen, there are still pros and cons to consider. Before you freeze your credit, make sure you understand the benefits and the consequences:

Advantages of freezing your credit:

  • No one will be able to open an account in your name without your PIN number and additional identifying information.
  • You can continue using existing credit card accounts as usual.
  • Freezing your credit does not have a negative impact on your credit score.

Disadvantages of freezing your credit:

  • You’ll need to take the time to freeze your credit with all three credit reporting agencies.
  • If you want to apply for new credit, you will need to use your PIN number to temporarily unfreeze your credit first.
  • If you open new credit cards or lines of credit frequently, the extra steps required to unfreeze your credit report could be inconvenient.

The bottom line

At the end of the day, placing a security freeze on your credit is a smart way to prevent identity theft before it starts. You will need to spend a few minutes on the computer to enter your information, but the peace of mind you gain will be well worth it.