Should You Freeze Your Credit in 2024?

Does the thought of someone getting access to your financial data and running amok with it give you nightmares? While I'd generally advise against panicking in all situations, it's certainly wise to be concerned about someone getting access to your bank account, credit card information, or Social Security number.

Signing up for a credit-monitoring service is a great way to mitigate your risk, but you might want to take it a step further and freeze your credit. Here's why, as well as how it works and a few other tips to keep your money safe.

Money losses due to fraud are up

While the rise of technology has made managing our finances easier, it isn't just honest law-abiding citizens who have access to that technology. Fraudsters and scammers are also using it to steal your identity and your money. According to the Federal Trade Commission, consumers lost $8.8 billion to fraud in 2022, and this was a jump of 30% from 2021.

If you want to keep your money and identity safe, freezing your credit is a good step to take. When you do this, you're basically locking down your credit reports so lenders can't run a hard credit check on you to approve or deny new credit applications. So even if someone gets access to your Social Security number and attempts to open a new credit card or take out a loan in your name, they will not be able to. When you want to apply for new credit, you'll need to contact the credit bureaus again to unfreeze your credit.

How do you freeze your credit?

It's easy to freeze your credit, and it's free -- you just need a little time and the necessary information to contact each of the three consumer credit bureaus. Here's how to do it:

• Experian: Create an Experian account online or call 888-397-3742.
• Equifax: Create a myEquifax account online or call 888-298-0045.
• TransUnion: Fill out a form through the TransUnion Service Center on its website or call 888-909-8872.

It's fastest and easiest to freeze and unfreeze your credit by phone or online, but you can also do it by mail -- you'll need to provide documents that prove your identity and it'll take a lot longer than calling or doing it online, so I recommend going that route.

Other ways to keep your finances safe

While freezing your credit is a good idea, you also have other options to keep your money and identity out of the hands of criminals. Consider these:

• Check your accounts regularly: At minimum, it's a good idea to review your bank and credit card accounts weekly. Doing so lets you check for suspicious charges (and report them ASAP), as well as avoid overdrafting your checking account and spending more on your credit cards than you can pay off before interest accrues.
• Keep financial information private: Don't give out your account information and Social Security number (and don't carry your Social Security card in your wallet, either). If you're expecting a new credit or debit card, keep an eye on your mailbox so you can snag it when it arrives -- before someone steals it out of your box.
• Don't click links: Before you click, think first. Would your bank send you a weird text message full of misspellings and bad grammar, exhorting you to click a mystery link to provide your account information? Probably not. If you suspect a problem with one of your accounts, go to that company's website on your own and see what's up.

The prospect of thieves and scammers getting your financial information is a scary one indeed. Freezing your credit can prevent new accounts from being opened in your name, and if you don't mind unfreezing it before you apply to borrow money yourself, it's a smart move to make in 2024.