How and When to Freeze Your Credit

Why Consider a Credit Freeze?

In today’s digital age, protecting your family’s financial future involves more than just sound investments, it requires proactive defense against identity theft and fraud. For high-net-worth families, family business owners, and individuals responsible for generational wealth, safeguarding your credit isn’t merely prudent; it’s essential. One of the most effective tools at your disposal is freezing your credit, a straightforward measure that can prevent unauthorized access and significantly reduce your risk of financial fraud.

What is a Credit Freeze?

A credit freeze, often called a security freeze, limits access to your credit reports held by the three major bureaus—Equifax, Experian, and TransUnion. It doesn’t negatively impact your credit score or restrict your ability to use existing credit accounts, but it does prevent new creditors from accessing your credit history. Essentially, it creates a barrier against fraudsters attempting to open new accounts or loans in your name.

Think of a credit freeze as setting up protective walls around your family’s legacy. Just as you would invest strategically to build generational wealth, freezing your credit is an investment in security, strengthening the protection of your hard-earned financial achievements.

How to Start a Credit Freeze

Before initiating a credit freeze, assemble the following information to streamline the process:

• Full legal name (the name on your birth certificate)
• Date of birth
• Social Security number
• Address history for the past few years
• Email address and phone number
• Valid government-issued ID (such as a driver’s license or passport)
• Proof of address (utility bill, bank statement, or lease agreement)

Having these details readily available ensures a smoother interaction with credit bureaus, making the process efficient and hassle-free.

You will generally be required to provide your Social Security number, date of birth, and address. You may also be asked to provide copies of documents like a driver’s license or utility bill to verify your identity.

Verifying a Credit Freeze

After requesting your credit freeze, you’ll receive confirmation from each bureau via mail, email, or an online dashboard. By law, credit bureaus must send written confirmation of a security freeze no later than five business days after the freeze is placed. If you request your credit freeze online or by phone, the freeze goes into effect almost immediately (within one business day), and the confirmation is typically sent shortly after. It’s critical to store these confirmations securely, as they contain important details on how to temporarily lift or permanently remove the freeze when needed.

Secure Your PIN or Password

Some bureaus provide you with a Personal Identification Number (PIN) or password that are vital for managing your freeze in the future. Secure this information just as diligently as you would protect other sensitive financial documents. Consider using an encrypted digital vault or secure storage location accessible only to trusted family members or advisors.

Maintain Vigilance

A credit freeze is robust protection, but vigilance is still key. Regularly review bank and credit card statements for suspicious activity. If you notice suspicious activity, immediately contact your bank or credit card issuer using the phone number on the back of your card or their official website. Request that they freeze or close the compromised account, reverse the unauthorized charges, and issue you a new card. Complement your credit freeze with a reputable credit monitoring service that sends immediate alerts if unusual activity is detected.

How to Temporarily Lift Your Credit Freeze

Occasionally, you’ll need to lift the freeze such as when applying for a mortgage, auto loan, or new credit card. Simply contact each bureau online or by phone, specifying the dates you’d like the freeze lifted. Typically, this process can take anywhere from a few minutes to 24 hours, so plan accordingly to avoid disruptions in your financial transactions.

Who Benefits from Credit Freezes?

While beneficial for everyone, freezing your credit is particularly crucial for:

• Business owners, who handle multiple financial transactions and are frequent targets of fraud.
• High-net-worth families, who are at greater risk of targeted identity theft.
• Victims of data breaches, whose information might already be compromised.
• Older adults and retirees, who may not regularly check credit reports and could overlook fraudulent activity.

Responding to Fraudulent Credit Activity

If you discover fraudulent accounts or suspicious activity:

• Immediately contact the company where the account was fraudulently opened and demand its closure.
• Place a fraud alert with one of the credit bureaus, which will automatically notify the other two.
• Report identity theft to the FTC at IdentityTheft.gov and consider filing a police report for additional legal documentation.
• Change your passwords, activate two-factor authentication on sensitive accounts, and consider initiating a credit freeze if you haven’t already done so.

Learn how to Combat Identity Theft & Protect Your Personal Information

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In today’s interconnected world, protecting your personal information is no longer a luxury, but a necessity. Identity theft can wreak havoc on your financial stability, credit score, and overall peace of mind. Taking proactive steps to secure your data can be crucial for protecting yourself and your family. This guide provides practical advice on safeguarding your personal information and mitigating the risk of identity theft.

Click Here to Read More

Additional Best Practices

Enhance your financial security by:

• Enabling fraud alerts to prompt additional verification by lenders.
• Utilizing strong passwords and two-factor authentication to secure your online accounts.
• Shredding sensitive documents containing personal or financial information.
• Regularly checking your credit reports, available free annually at www.annualcreditreport.com.

Preserving Your Financial Legacy

At Archford, just as thoughtful financial planning is crucial to preserving generational wealth, proactively managing your credit security is equally critical. By freezing your credit, you create an additional layer of defense, giving you and your family peace of mind knowing your financial legacy is well protected.

If you found this information valuable, consider sharing this guide with your loved ones, friends, or business colleagues who could also benefit from enhanced financial protection. Please don’t hesitate to contact us if you have any questions or would like additional information.

Past performance is not indicative of future results. The material above has been provided for informational purposes only and is not intended as legal, tax, or investment advice or a recommendation of any particular security or strategy. The investment strategy and themes discussed herein may be unsuitable for investors depending on their specific investment objectives and financial situation. Information obtained from third-party sources is believed to be reliable though its accuracy is not guaranteed, and Archford Capital Strategies, LLC (“Archford”) makes no representation or warranty as to the accuracy or completeness of the information, which should not be used as the basis of any investment decision. Information contained on third party websites that Archford may link to is not reviewed in their entirety for accuracy and Archford assumes no liability for the information contained on these websites. Opinions expressed in this commentary reflect subjective judgments of the author based on conditions at the time of writing and are subject to change without notice. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission from Archford. For more information about Archford, including our Form ADV brochures, please visit https://adviserinfo.sec.gov and search for our firm name.