What you have to do if your credit is frozen

Posted by: Aiden white on

For many years, dealing with frozen credit accounts were a headache to all credit card users. But fortunately, today if you have somehow frozen your credit, you have a few new options to explore. Yes, you can easily unfreeze your credit. But for that, you may need to follow certain expert advice.

But first, you must know what a credit freeze is and why it is happening.

What is a credit freeze?

Credit freeze or security freeze gives you the option to restrict access to your credit report. For this reason, identity thieves can’t access or open your credit report to create new accounts in your name. It’s good to freeze your credit if you are experiencing an identity theft issue or fraud. But it also has a negative impact too. Most creditors need to see your credit report before approving a new account. If they can’t access your report, they won’t extend the credit.

Once your credit is frozen, you may still apply for a loan or a credit card. Funny thing is your application practically won’t be approved by the lenders or credit card companies. The reason is, as your credit profile is frozen, your credit report can’t be accessible by any third party due to the block.

So, without a proper credit check, a potential lender doesn’t approve your loan application.

You might be thinking that it will be treated as a hard inquiry and hurt your score.

No, it won’t hurt your credit. There was no hard inquiry at all as the lender couldn’t get his hands on your credit profile.

But for your future applications, you need to unfreeze your credit and try again.

Here’s how to find out at each credit bureau whether your credit is already frozen or not.

How to check if your credit is frozen

Equifax Trans Union Experion
Online – You need a myEquifax account and need to log in. At myEquifax.com, you can see a tile on the upper right of the dashboard. That will show you your credit freeze status. Online – It can be checked online at the TransUnion website, You need to put your username and password. After a successful log in, you may see your account status appear at the top of the page. Online -As per Rod Griffin, Experian’s director of public education, you need to visit Experian’s “Security Freeze Center” page and select “retrieve my personal identification number (PIN).” You’ll see the “Request your PIN” screen. If there is a PIN available, you will get that and you may use it to lift your freeze. If there is no PIN, you’ll be notified that there is no record, and your credit is not frozen.
By phone – If you don’t have an account, or want to check by phone, you may call 800-349-9960 and follow the instructions to verify yourself. If your credit report is not frozen, you will only hear options for freezing it. If it is frozen, you will hear only options to unfreeze your credit. By phone – You can also call 1-888-909-8872. By phone – You may also call 1-888-397-3742 and follow the instructions. Your Social Security number and ZIP Code will be required. Once you are getting identified, you’ll get the option to unfreeze your credit if it is frozen.
By mail – You’ll need to download this form from Equifax. After verifying your identity, Equifax will lift the freeze. Mail to Equifax Information Services LLC, P.O. Box 105788, Atlanta, GA 30348. By mail -Mail your written request to TransUnion LLC, P.O. Box 160, Woodlyn, PA 19094. By mail – Mail to Experian Security Freeze, P.O. Box 9554, Allen, TX 75013.

FAQ about freezing and unfreezing credit

Now, once you know that your credit is frozen, the first thing you should do is to contact your credit bureau and ask some questions.

These are the questions and answers that may help you in this situation:

#What are the options available for unfreezing credit?

You can lift your credit freeze for a certain period, after that, it will be automatically reinstated. You have the option to lift the freeze permanently. But it can make your credit profile vulnerable to criminal activities. Credit expert, John Ulzheimer, suggests that you may unfreeze your credit for 7 days, for most credit card applications and loans. If you are getting approved for a mortgage, unfreeze the credit until your closing date.

#How do you unfreeze the credit?

As I said earlier, once you lift the freeze on a temporary basis, it will again become frozen at the end of the time period. But if you permanently lift the freeze, it won’t be refrozen automatically. You need to refreeze the account just like you were freezing your credit for the first time.

#Is it possible to get approved for a loan or credit with a freeze on your account?

Practically, you will not get approved for a loan or credit card with a freeze on your account. Creditors will fetch your credit report before deciding on your application. So, once they can not reach your credit profile due to the freeze, they won’t approve your application at all.

But there are exceptions. You may choose not to freeze your credit in all three credit bureaus at a time. This way the creditor can check any one of your credit reports where your credit is not frozen. Apart from that, you may also apply for a “no-credit-check” loan or credit line.

#Does a credit freeze affect credit score?

A credit freeze does not affect your credit score . There are few other things that
a credit freeze does not prohibit:

  • You may get your free annual credit report .
  • You can open a new account after lifting the freeze temporarily. It’s free to lift the freeze and free to place it again. As per usatoday on sept. 21,2018 – “a new federal law allows people to freeze and unfreeze their credit at the three major credit bureaus without being charged. Before, it cost consumers in almost half the states $3 to $12 per bureau to freeze or unfreeze their credit reports.”
  • You may apply for a new job, rent an apartment, or buy insurance coverage. Your credit freeze doesn’t impact these cases.
  • Credit freeze can’t keep you safe from being a victim of further fraud. A thief or a fraudster can charge your existing accounts if he/she gets all of your data. You still need to monitor your bank accounts, credit cards, and insurance statements regularly to identify any fraudulent activities.

#Can anyone check your credit report when it is frozen?

Certain authorities may access your credit profile even if it’s frozen:

  • Your credit report can be accessible to your existing creditors and to the debt collectors.
  • Federal agencies and government authorities may also access your credit report if they require. For that they need to show you proper court orders or administrative orders and a search warrant.

Endnotes

As per consumer.ftc.gov – If you opt for a temporary lift because you are applying for credit or a job, and you can find out which credit bureau the business will contact for your file, you can save some time by lifting the freeze only at that particular credit bureau. Otherwise, you need to request all three credit bureaus.

This way you may customize when to unfreeze your credit. Freezing your credit is quite effective to prevent criminal activities such as identity theft. You can choose to unfreeze for a specified time period, after which the freeze automatically resumes.

How to improve your credit score within 6 months

Posted by: Aiden white on

“How to fix my credit score!!!” – It is one of the biggest queries in Google search. Whether you are a serviceman or entrepreneur, an investment banker or a common person, improving credit score is everyone’s prime concern.
 
Having good credit is a must to take out a mortgage, credit cards, any personal loan, even insurance. Credit scores are important as they denote your creditworthiness, how much you are trustworthy to get a loan or something like that. You must let the creditor or lender know how good you are at paying back the money.

#Why did the credit score drop?

There are several reasons that may impact your credit score and make it lower:

  1. If you have missed any monthly payment on loans or credit cards.
  2. A piece of wrong information is listed on your credit report.
  3. You’ve suddenly closed an old credit account with a decent payment history.
  4. If your credit utilization ratio is too high, such as you use your credit cards for everything to its limit.
  5. If you have applied for multiple new credit cards or loans.

#How to improve credit score quickly

You might be thinking about how to fix your credit score because it is much lower than what you have expected. Yes, you can do this with a few simple steps.
 
Your first step should be to stop panicking. You must avoid asking the lender to check your score and see if it is good enough yet or not. Repeated checking by the lender can be treated as a “hard” inquiry into your credit, and your score may drop by a few points.
 
However, you don’t need to be stressed about a “soft” inquiry, when you check your credit yourself. You may easily check your credit report as much as you like. You should regularly check your credit report to keep it free from errors.
 
Here are some important tips to improve your credit score within 6 months that you can try:

a) Check for errors

The easiest way to fix your credit score is to review your credit report for errors. Credit bureaus may also make mistakes to list all the items on your credit report accurately. So, you must ensure that every item such as credit card payment, loan amount, on-time payment status, and others are correctly updated.
 
If you find an error, contact your credit bureaus and dispute the error. It is worth it to contest and you may save a lot of money in the long run.

b) Pay off your credit cards on time

Late payments can be listed in your credit report for 7 years. So, you have to deal with this issue first. Paying your bills on time is the most important tip to fix your credit score.
 
If you have some financial crisis, you just have to pay the minimum balance only.
 
You must remember that the most important component of a FICO credit score is your credit history. So, being regular on your payments can influence 35% of your score.
 
Beware! Even one late payment can affect your credit score. If you are consecutively doing that, you’re ruining your score.

c) Minimize your hard inquiries

Every time you jump for a new line of credit, such as loans or credit cards, your credit report might be pulled by lenders or credit card companies. This is called a hard inquiry. Hard inquiries can hurt your credit badly.
 
If your prime objective is to improve your credit score within 6 months, it’s the best time to minimize the number of hard inquiries.
 
The less hard inquiries you have, the less effect it will have on your credit score. Multiple inquiries are generally counted as one inquiry for a given period. It may vary depending on the credit scoring model used, but it’s typically from 14 to 45 days.

d) Keep balancing your credit portfolio

Another great way to fix your credit score within 6 months is to thoughtfully handle your credit accounts. You mostly will have to maintain a few revolving consumer credit accounts such as credit cards, store credit cards, store lines of credit, and fixed loans.
 
The credit bureaus will focus on the credit profiles that are nicely balanced with a good credit mix. The mix credit accounts on your portfolio may include things like a mortgage, car loan, student loan, and consumer debt. Maintaining such a credit mix and making all the monthly payments on time will be helpful. This way you may improve the credit score in a short period.

e) Lower your debt ratio

A good, fast way to improve your credit score is to keep your credit utilization low. You should lower your credit usage to boost your credit score. You may pay off all of your credit card debts and other unsecured debts to lower the ratio. Credit bureaus prefer a consumer credit profile with a credit utilization ratio of less than 30%.

f) Check credit history length

Credit agencies prefer credit profiles that have a long credit history, particularly accounts that have been open for a longer period and well managed. Accounts that have a more than 10-year credit history are helping your score to get better.
 
Get a copy of your credit report from the major credit bureaus and point out the accounts that have a long history. Use those accounts frequently and pay them on time. This way you can help to improve your credit score. You may also eliminate some of the recent accounts that are no longer required but don’t remove them at a time; otherwise, it may reduce your credit limit instantly

g) Ask for a higher credit limit

If you want to reduce your credit utilization ratio below 30%, but can’t pay off your debts because of a financial crunch, look out for other ways to fix your credit score.
 
You may ask your credit card company to increase your credit limit. This way you have more available credit in your hand and it’ll boost your score.

h) Become an authorized user

Ask a family member or friend with a long and good credit record (a person who handled credit cards well and makes on-time payments) to add you to his or her card as an authorized user.
 
This way you can get the share of his/her good credit score, and you’ll have a longer credit history. The account holder doesn’t have to give you the card or share details at all.
 
Being an authorized user is best for you if you have little credit experience, and want to improve credit score within a short period.