Identify theft numbers continue to rise each and every year. 2017 saw an 88% year-over-year rise in credit card number exposure, for a total of 14.2 million cards. Nearly 158 million social security numbers were disclosed as well.

Of course, Equifax deserves a huge amount of the blame for last year’s atrocious numbers. Their well-documented security breach resulted in the disclosure of over 148 million individual’s personal information.

But if there is a silver lining to be found in the wake of the Equifax breach its that it forced the government to take a serious look at how we handle identify theft in the United States. And as a result, the Dodd-Frank Reform law was passed last Friday that allows anyone from any state to freeze their credit completely free.

What Is a Credit Freeze?

While the vast majority of Americans have never even heard of a credit freeze, it is the only fail-safe way to protect yourself against credit card fraud.  After completing a credit freeze, no one (including yourself) can apply for credit under your name.

The reason why credit freezes are so effective is that they protect your credit from being accessed even by someone who has acquired your personal information.

After completing a credit freeze, no one (including yourself) can apply for credit under your name.

Credit Freeze Limitations

It should be noted though that while a credit freeze can keep any new accounts from being opened in your name, it cannot protect against misuse of current bank or credit card accounts, which unfortunately is the most common form of identity theft.

A credit freeze also cannot protect against medical and employment identity theft, or tax fraud.

Should Everyone Freeze Their Credit?

Before this week, some of us would have had to consider whether we felt it was worth the cost to freeze our credit, which could cost $3 to $12 per bureau. Additionally, many of these states would charge consumers again whenever they needed to “unfreeze” their credit (something that we will talk about later).

Now that credit freezes are free, cost is no longer an issue. But still, if you are about to apply for a mortgage or some other loan, you would probably want to wait to freeze your credit until afterward.

How to Freeze Your Credit

You will have to freeze your credit with each credit bureau (Equifax, Experian, and TransUnion) separately. All three have a security freeze link on their websites. After completing the credit freeze application, you will give be given a secret pin that must be used in order to unfreeze your credit in the future.

You do NOT want to lose your pin, so make sure you put it somewhere safe where you won’t lose it.

For a step-by-step walkthrough on how to freeze your credit, I would recommend that you read this guide from Clark Howard. He’s been out-front heralding the benefits of the credit freeze for years, and his guide really is the best out there.

Can I Still Use My Credit Cards?

Yes! A credit freeze has no effect whatsoever on credit cards that you already own. This means you can continue to improve your credit score, even while your credit is frozen!

How to Unfreeze Your Credit

Credit freezes do their job SO well that at times they can be a bit of an inconvenience.

What if you legitimately want to apply for a particular rewards card? When your credit is frozen, you can’t. The same is true if you need to have your credit run to apply for a mortgage or even a furniture store payment plan. So, what can you do in these situations?

What if you legitimately want to apply for a particular rewards card? When your credit is frozen, you can’t.

Thankfully, you can unfreeze your credit for a set amount of time – say a couple of days, a week, or a month. In order to do so, you’re going to need to use the pin that we discussed earlier. Again, I would highly recommend checking out Clark Howard’s guide if you need to “thaw” your credit.

Can Parents Freeze Their Child’s Credit?

Yes. Dodd-Frank Reform also requires the credit bureaus to create and freeze credit files for children under 16 upon their parent’s request. And it’s something every parent should seriously consider, as children are far more likely to be victims of identity theft than adults.

Here’s a couple of things to be aware of though. First, child credit freezes cannot be done online. Second, credit freezes will not protect your child against the fast-growing problem of “synthetic identity theft.”

Despite these limitations, I would highly recommend that parents freeze their child’s credit. Failing to do so could result in your son or daughter going to apply for their college FAFSA only to find out that their credit has long since been destroyed by an impostor.

Credit freezes will not protect your child against the fast-growing problem of “synthetic identity theft.”

Sixteen and 17-year olds must request their own credit freezes online at the three national credit bureaus.