New legislation that requires credit reporting agencies to allow free credit freezes will simplify safeguarding your financial history, according to Virginia Tech expert Travis Mountain. Prior to the change, which will take effect September 21, 2018, users had to pay a $10 fee to freeze each of their three credit reports, but under the new “Economic Growth, Regulatory Relief, and Consumer Protection Act,” credit reporting agencies will be required to remove the fee and maintain a webpage for credit freeze and fraud alert requests.
“For a lot of people it wasn’t the dollar amount that dissuaded them from getting a credit freeze, it was the idea of having to pay for something that they never signed up for,” said Assistant Professor Travis Mountain. “No one chooses to have a credit report or not have a credit report through a specific credit reporting agency. You have no control – if you ever sign up for any form of credit, whether it’s getting a loan or credit card, Equifax, Experian, or TransUnion has your data. You sign paperwork with the bank or Credit Card Company, but at no point do you ever sign paper work with Equifax, Experian, or TransUnion, those are just the agencies that keep track of credit records.”
Mountain recommends that anyone with credit take advantage of the new legislation.
“From a financial perspective, there’s no reason not to do this,” Mountain said. “This freeze would say that no one can look at your credit without you giving them permission. Right now, if you don’t have a credit freeze, anyone can take out credit in your name if they have your information. But with a credit freeze, people won’t be allowed to apply for loans or open credit cards in someone else’s name because fraudulent applications will get bounced back. There’s definitely going to be a bit of inconvenience in taking the steps to freezing your credit file, and unfreezing it when you want to take out new credit, but the inconvenience on the other side if someone does take out credit in your name would be 100 times more inconvenient.”
Mountain is a Virginia Cooperative Extension Specialist and an assistant professor of agricultural and applied economics in the Virginia Tech College of Agriculture and Life Sciences. He specializes in financial and economic well-being including behavioral economics and financial decision-making. His research has accorded him multiple awards within the field of consumer financial interests.
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