Go for a ‘credit freeze’ if you want the protection of credit data

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Breach of data security is a cyber virus to which we are all vulnerable. All our data are just a click away from fraudsters. Nowadays people want to be extra cautious as far as the sharing of private information is concerned.

This is when credit freeze can help in tackling data breach. If you are worried about data theft, you can freeze or lock your credit report at the different credit bureaus in the country.

A credit freeze protects your credit report from any possible data breach. It eliminates the possibility of a scamster or fraudster beginning a credit account in your name.

What is a credit freeze?

Freezing of credit refers to the prevention of fraudsters looking to steal an individual’s identity by opening unauthorized accounts in someone’s name.

By “freezing” credit, you are mainly locking down the credit information and thereby, preventing access by fraudulent people who can use your account details and indulge in acts of crime and fraud.

How it works

Suppose a person named Ravi may not be comfortable sharing his private details including the credit information with anyone other than his bank. For this, he can request all the credit reporting agencies for her credit report to be “frozen”.

This means the details around his credit report will not be shared with anyone except the financial institution that he has authorized.

One has to reach out to all the credit bureaus i.e. CIBIL, Equifax, or Experian separately and follow their separate processes since they could be different from each other.

After effect

After ‘credit freeze’ your credit information will still be accessible to certain entities like your bank.

You can still access your credit information and get your free credit reports whenever you want. Your existing creditors will still be able to access your credit information.

Pros and cons

A credit freeze can prevent data theft as it blocks potential new lenders from accessing your credit information without your permission.

But on the other hand, for lifting back credit freeze, you will have to reach out to each bureau separately. This can be a time-consuming process.

Besides, a credit freeze can hold your other priorities, especially if you plan to apply for a credit card, personal loan, or home loan.

This will require you to lift the credit freeze and since it can be a time-consuming one, your application process could be delayed.