What You Should Know About the New Credit Law

credit card

Here’s what you kneed to know. | SeventyFour/Getty Images

Thanks to a new law, fees for a credit freeze are now a thing of the past. As of Sept. 21, 2018, a credit freeze will now be free of charge in all 50 states. This is good news if you’re looking to protect your credit. In her column, the Federal Trade Commission’s Lisa Weintraub Schifferle discussed the most important things consumers should know about the new credit law. Here’s a recap of some of those points.

Existing credit freezes will still be active

Don’t worry about existing credit freezes. If you already had a credit freeze in place when the new law took effect, it will still be in effect.

There will be no refunds

If you’re looking for a refund for a past credit freeze, you’re out of luck. Know that if you had a credit freeze before September 21, 2018, you won’t get your money back.

Your credit score won’t be affected

Your credit score doesn’t automatically freeze just because you have a freeze on your credit. Your score can still change while a freeze is active. Creditors are still able to report activity, whether it’s positive or negative, on your accounts.

You can still use your credit card when a credit freeze is in place

You’ll still be able to use your credit card and any other existing credit accounts. The only thing a credit freeze limits is access to your credit file. This restriction makes it difficult for identity thieves to open new accounts in your name. The reason a credit freeze adds a layer of difficulty is that most creditors need to view your credit file before they approve a new account. Furthermore, if you’re applying for new credit, you’ll first need to have the credit freeze lifted.

Placing a fraud alert is different from placing a credit freeze

If you want to place a fraud alert, all you have to do is notify any one of the three credit bureaus and that bureau will alert the other two. The fraud alert will stay active for one year.

If you want to place a credit freeze, you’ll need to contact each of the three credit bureaus separately. A credit freeze will remain active until you make a request for the credit bureau to temporarily lift the freeze or remove it. You can find contact information for Equifax, Experian and TransUnion when you visit IdentityTheft.gov/creditbureaucontacts, which has a list of all of the links and phone numbers.

Things to keep in mind

  • You can still conduct activities such as opening a new account or renting an apartment when a freeze is placed on your credit. However, you will first have to temporarily lift the freeze. There is no charge to lift or replace the credit freeze.
  • Some people can still see your credit report even after your credit is frozen. For example, your credit report could be shared with existing creditors or debt collectors.

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