Credit Freeze or Credit Monitoring?

You often hear about data breaches in the news, or unfortunately, through a data breach notice from a company. Most of the time that a data breach occurs, the company offers a credit monitoring service to help protect its customers from the consequences of the data breach. This is an "after the fact" type of approach to protecting consumers. However, there is another way to protect your personal information and that is through a credit freeze.

The main difference between credit monitoring and a credit freeze is that credit monitoring notifies the consumer when someone tries to use the consumer's credit information, while a credit freeze blocks use of a consumer's credit information for the purpose of obtaining new credit. Most businesses will not open credit accounts without first checking a consumer's credit report. If a consumer's credit files are frozen, even someone with a consumer's name and social security number probably would not be able to obtain credit using the consumer's name. However, with credit monitoring, someone could use the consumer's information to obtain credit.

A credit freeze can be somewhat of a nuisance. Anytime a consumer wants to obtain new credit, they have to remove the freeze, or temporarily "thaw" the freeze to allow the business to check their credit.

The cost of freezing credit is $10 per reporting agency for Wyoming residents. It is free for the first credit freeze for Colorado residents. There is another charge to remove or temporarily "thaw" the credit freeze.