As consumers learn more about the the Equifax data breach, they have more questions about their potential exposure to identity fraud.
The Atlanta-based credit reporting agency recently announced that as many as 143 million people may be at risk after “criminals” exploited a website vulnerability and accessed files earlier this year. Equifax, one of three main cogs in the U.S. lending industry, waited six weeks to tell the public, leading to outrage and calls for class-action lawsuits.
Money expert Clark Howard says the No. 1 way to protect yourself from identity fraud is by freezing your credit. This will prevent anyone from opening a new line of credit in your name.
But what are the cons of freezing your credit?
Does freezing your credit have any drawbacks?
One of the main drawbacks to freezing your credit is that it paralyzes your ability to obtain new credit. If you’re in the market for a new vehicle, home or even trying to get another credit card, the credit bureaus will stop the inquiring company from assessing your credit because of the freeze. This may throw a serious wrench in your ability to buy big-ticket items that you need to finance and could delay major life events like buying a home or car.
The only way to get around this is to thaw — unfreeze — your credit, which leaves you temporarily exposed, albeit maybe with a new car or home. Before applying for more credit, it’s a good idea to reach out to the lender and ask them when the best time to thaw your credit would be.
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If you have specific questions about the Equifax breach and how it may impact you, contact Clark’s Consumer Action Center — a FREE help line open Monday-Friday from 10 a.m. ‘ 7 p.m. EST with volunteers available to answer YOUR concerns! Call Team Clark @ 404-892-8227.