A bipartisan Senate bill, slated to be approved this week, will prohibit credit bureaus from charging for freezing or unfreezing your credit report. The bill would require credit-reporting agencies to institute a freeze within three days of request and unfreeze within an hour. If the bill becomes law, it would amount to at least one positive outcome of the massive Equifax data breach last year. (CNBC | WSJ)
One important way to limit credit fraudsters from signing up for accounts using your identity is to freeze the credit reports under your name, making it impossible for banks to approve a new account. The credit reports most often utilized are Experian, Equifax, and Transunion, though there’s also a Chex Systems credit report which is often used for bank account approvals.
It’s possible to freeze and unfreeze your credit report on whim; currently there is a fee in most states (typically $5 or $10) to freeze or unfreeze or both. Equifax has only waived these fees until July, and the proposed bill would make it obligatory that all credit bureaus forever allow freezes and unfreezes at no cost, either electronically or by mail.
Both Equifax and Transunion already have a free option to ‘lock’ your report. Basically, a lock is the same thing as a freeze, but it’s not government mandated so the can, for example, use it as a platform to up-sell products within the locking process. Transunion has apparently been offering this for a while under the name TrueIdentity, and Equifax rolled this feature out in response to the breach under the name Lock and Alert. Again, these products are not government regulated, and can be changed or used at the bureau’s fancy. Chex Systems does allow free credit freezes.
This bill is certainly a step in the right direction in terms of empowering consumers. There’s no question it’s a pain to remember freezing and unfreezing at each application. Part of the difficulty is the way there are three unique bureaus. Would be much more real if there was a single united login where someone can freeze or unfreeze their credit, but that’s probably not realistic.