Smart Money Podcast: Money Procrastination, And Unfreezing Credit
Welcome to the NerdWallet Smart Money Podcast, where we answer your real money questions.
This week's episode begins by discussing how to stop making financial decisions.
So let's get to this week's money question from April , who left a voicemail:
"Hello, my name is April. Unfortunately this year I received a W-2 in the mail that was torn and half missing. And I was worried about my social security number being at risk and my identity being stolen and all that. So I sent my credit from all three major credit bureaus and should I use my credit to get a loan or credit card or something in the future or should I freeze it for all three agencies or is that it? Is it enough to go through the draining process in an hour? How can I afford the time it takes to open a loan for a certain period of time? Thank you."
Watch this episode on one of the following platforms:
Apple Podcasts
Spotify
Our glove
Money can be confusing, which means financial decisions are often avoided. According to NerdWallet's June 2022 online survey, The Harris Poll, 4 in 5 Americans say they put off making financial decisions.
To avoid financial problems, try to contact a specialist who can help you. There are many free or low-cost financial resources available to help you in the decision-making process. Or, if you want to manage your own finances, imagine your ultimate goal and how good you'll feel once you achieve it. This could be the motivation you need to move forward with taxes, probate, refinancing or other financial transactions.
One financial decision you may face is whether or not to foreclose on your loan. A credit freeze is a measure that prevents people from using your personal information to open new credit accounts in your name. A credit freeze is a line of defense against certain types of identity theft, especially if you suspect your financial information has been compromised. Ideally, you should close your credit with all three bureaus: Equifax, Experian and TransUnion. Freezing your child's credit may also be a good idea.
You can contact the credit bureau online, by phone or by mail to open your loan. You can also unlock or lock your credit for a period of time, perhaps when you apply for credit and reset the lock.
Our advice
- Anti-fraud blocking: Freezing your credit profiles with all three credit bureaus is one of the best ways to protect yourself from credit theft.
- Learn how to freeze: You can freeze your credits temporarily and freeze them automatically.
- Think of the children : If you have children, freezing their credit profile can help prevent years of fraud.
Have a question about money? Email us or call 901-730-6373. Or you can email us at podcast@nerdwallet.com. Go to the podcast homepage to listen to past episodes.
Transcript of the episode
Liz Weston : Locking your credit can be the difference between protecting yourself from fraud or falling victim to a scammer. In this issue, we'll show you how and when to protect yourself with a credit freeze. We'll also answer some questions about student loan debt cancellation.
Sean Pyles: Welcome to the NerdWallet Smart Money Podcast, a show where you ask money questions and we answer them with the help of our genius nerds. I'm Sean Piles.
Liz Weston: And I'm Liz Weston. If you have questions about how to manage your money, give us a call or call the Nerd Hotline at 901-730-6373. This is 901-730-NERD. Or email us at podcast@nerdwallet.com. Subscribe to get new episodes in your feed every Monday, and if you like what you hear, leave us a comment and tell a friend.
Shawn Pyles: In this episode we're answering questions from listeners about freezing and freezing your credit, but first, on the episode "On Your Money This Week," Liz and I talked about how to stop procrastination.
Liz Weston: Because maybe if we talk about it, we'll stop doing it.
Shawn Pyles: Yeah, or we could go on and on about it, but I think it's a problem that everybody has from time to time. One statistic that I find particularly interesting is that 4 out of 5 Americans say they put off financial decisions 80% of the time, and 35% of those who put off financial decisions say it's because they feel stressed. June report. The 2022 NerdWallet Poll was conducted online by The Harris Poll.
Liz Weston: Well, at least we have lots of friends. Glad to hear that.
Shawn Pyles: Yes, but it shows how hard it is to overcome procrastination and actually do what you want, and I think it's important to start by thinking and exploring: why are you putting it off? For some, this can be an emotional barrier. They may fear making the wrong decision or not making the "best decision." And a tip I got from a podcast somewhere on the air: It's not up to you. What matters is what you do with the decisions you make. So nothing can ever be perfect. This is how you can move forward and live the life you want, given the current state of affairs.
Liz Weston: Yes. A while ago I wrote an article on the topic that some of us raise and try to raise every decision, which can be a lot of research and a lot of confusion. It is very difficult because you cannot get perfect information. Sometimes you just have to believe and make a decision. For us, high expectations can be a bit overwhelming.
Sean Piles: Yes, it is. Well, on the other end of the spectrum, I sometimes feel like I struggle to get started, whether it's a new garden project or a painting I'm doing because I lack the know-how. I'm actually going to go further to you in making this decision, where I'm going to start doing a lot of research and then at some point I'm going to agree to say, OK, I feel like I do. I know enough, let me go make decisions.
Liz Weston: Another thing I saw recently was a study about how many of us think money is cold. It was very cold, emotionless. This is not something we want to do and may cause us to delay this decision. And that's true even if you make a living doing what we do, advising people about money. Sometimes it's not there, I can't do it.
Shane Piles: Yeah. And sometimes many people forget that the financial business is very tiring, time consuming and difficult, so it can be a big obstacle because you shut down and it's scary and uncomfortable to do that, what else do you want to do.
Liz Weston: One thing that helps with that is getting help. If you're struggling in one of these areas, it can be really, really great to have someone to give you the information you need, hold your hand, and guide you through the process. Sometimes this advice can be expensive, but if you're stuck and don't know what to do next, there are articles on our website that show you how to get free or low-cost financial advice.
Sean Pyles: And if you're looking for a new credit card or thinking about how to save for a down payment on a house, we have a lot of information on the NerdWallet website to help you learn more about that . You can make the right decision. .
Liz Weston: Yes exactly.
Shawn Pyles: We talked about how you can get out of your routine if you don't have someone to help you and hold your hand. One thing I want to do is think about why am I, why is it so hard for me to make this decision, and why do I want to do it in the first place? And it doesn't have to be absolutely dignified. Sometimes I want to file my taxes on time to avoid a penalty or to make sure I'm actually saving for what I'll be paying six months from now.
Liz Weston: Oh, that's a great idea, think about the results and how good you'll feel afterwards.
Sean Pyles: Sure. Because it can be very easy to get stuck in the present and not think about what the outcome will be down the road.
Liz Weston: Sometimes these tasks don't take as long as we think.
Shane Pyles: Yes, that's absolutely true. I think sometimes I spend too much time thinking about what I want to do. I thought it would take hours to log in and set up various savings accounts and direct deposit withdrawals, and guess what? It took no more than 15 minutes and I was talking about 15 minutes from the time I opened the laptop to closing it. Before that, I could do what I thought two weeks ago, and it was great.
Liz Weston : I've had the opposite experience of going into something and thinking, OK, I can do this in a few minutes, and it could take hours, and I think that's what people really think. They teach you. So sometimes not making a decision is worth more than making a decision.
Sean Pyles: This is what I try to tell my friends who have a lot of credit card debt. I know a lot of these things can be subtle and difficult to work out, but what I mean is that you are in debt right now. Maybe if you consider a balance transfer card or talk to a credit counselor and try signing up for a debt management plan to make your debt more affordable, you'll save a lot of time and money paying off your debt.
Liz Weston: Yeah, if you have one of those great jobs, it takes a lot of time. Breaking it down into smaller chunks can be very helpful, and writing things down on your calendar to deal with situations can be very challenging. Even if you can't take care of it right now, just having a date on your calendar that says, OK, fix it today, can help you move forward when you're struggling to make a decision.
Shawn Pyles: Yeah, and I really like to combine the two styles. So let's say you've been looking for months to get a robo-advisor account, and you know it's probably something you should do, but you haven't done your research yet. You may not be entirely sure what a robo-advisor is. So maybe make an appointment, maybe Sunday afternoon at 1:00, when you get back from the farmers market, pull out your laptop and spend the day reading articles about it. It may take you 30 minutes to read all the articles as they are not too difficult. And then think, chew for a week. The next week you go in and say, "Okay, I've done all my research, so I've finally picked one," and the next week you probably fund it, so you're slowly making progress. And then, after a few weeks, you'll earn money over time.
Liz Weston: Yeah, and I've seen people take a whole day, they know a job needs to be done at another time. But when you do, improving on this decision can really help your finances, make you feel more comfortable, and reduce stress in your life.
Shawn Pyles: I like the idea of thinking, are you someone who wants to call it a day and go all out? It works for some people. For me, maybe my ADHD mind, I think I might be a little more confused. I like to do five things at once, so when I get back from the farmer's market, I hop on the computer and do a few quick errands, then 30 minutes later I'm at the park. But I like to switch from one thing to another and I'm gradually improving in different areas, but that's just my personal style.
Liz Weston : Yes, you mentioned ADHD, and people with ADHD have a hard time processing sad details. This can be a real problem. So trying to sit down in one day is torture. So set it up. Do what works for you.
Sean Piles: I know. Well, before we get to the money questions in this episode, we want to answer some quick listener questions we've received recently about student debt relief. A listener left us a voicemail asking how interest rates play a role in the debt relief process.
Liz Weston: So do we have an answer to that?
Sean Pyles: We have the answer I've been looking for all this time and I'm glad the details have been revealed. And we have an article [Student Loan Cancellation] that we link to in the show notes, nerdwallet.com/podcast. You can find it there. But basically, if you have multiple loans of the same type, the one with the highest interest rate will be canceled first, which is good news for people with high interest rates. This is what worries my partner, who has an interest-free student loan. He paid all the interest. But then he had a graduate interest loan and was afraid of getting stuck with a very expensive loan, in fact the opposite happened, which is good news.
Liz Weston: And to recap, student loan debt cancellation only works for federal student loans. For many people, it's up to $10,000. If you get a Pell Grant in college, it will be $20,000.
Shawn Pyles: And there's an income cap on that, so if you make less than $125,000 in 2020 or 2021, you qualify for that, single or married. And the maximum income limit for married couples filing a joint return is $250,000.
Liz Weston : Yes, Dan Sean, you mentioned Garrett's graduate student loans, and another listener wrote us asking if the federal student loan repeal would only apply to college student loans or if it would apply to student loans as well. graduate.
Shane Piles: Yeah. Drum sections. This applies to both. Unsubsidized direct graduate loans can be canceled just like the original PLUS loan. I think a lot of people are lost in the news. It's not just about college debt. This applies across the board to federal loans.
Liz Weston : Ah, this is good news for many parents who have too much debt to send their children to school.
Sean Pyles: Dear listeners , we know you have a lot of questions about federal loan cancellation, and we'll keep you updated as it develops. If you have any questions for us, please send them to us on Nerd Line. You can call or text 901-730-6373. This is 901-730-NERD. Or email us at podcast@nerdwallet.com.
Liz Weston : Okay, let's move from this part to the money.
Sean Pyles: Let's do it. The financial questions for this episode are from April, who left us a voicemail. Here he is.
Listener : Good day. My name is April. This year, unfortunately, I received a stolen and half-lost W-2 in the mail, so I was worried that my social security number might be stolen, stolen, etc. . So I have blocked my credit from three major credit bureaus and I am wondering if I need to use my credit for a loan, credit card or something else in the future, should I block all three? Is it easy to do the opening process in the office? What should I do when I need to open a loan for a certain period of time? Thank you
Liz Weston and NerdWallet writer Amanda Barroso join us to answer April's question. Welcome to Smart Money, Amanda.
Amanda Barroso : Thank you Liz and Sean, I'm so glad to be here with you all.
Sean Pyles: Nice to talk to you. So Amanda, let's start by explaining what it means to freeze your credit. Can you give us a brief description?
Amanda Barroso: Absolutely . So a credit freeze essentially prevents people from opening new credit accounts in your name using your personal information. For example, if someone steals some of your personal information when you apply for a new credit account, the application will be blocked because the lender will not be able to access your credit or process your credit to approve your application. So this is a great protection against some types of personal data theft, some fraud. It's not a complete guarantee, but it's a great first step in protecting yourself. Ideally, you should block credit from all three bureaus, and the top three credit bureaus are Equifax, Experian, and TransUnion.
Shawn Pyles: Let's talk a little bit more. Why is credit blocking important in all three bureaus and not just one?
Amanda Barozu: All the offices are separate organizations and actually have nothing to do with each other. They are competitors. So you want to start a block with each office because, as I already said, blocking credit with one does not automatically activate the block with the other two. And another reason it's important to block credit at all three is that not all lenders use or report to all three bureaus, so if someone tries to steal your identity or open a fake account in your name, a merchant who They use Experian, for example, to check your credit, but you just pull your credit over to, say, Equifax. Perhaps, they will be able to open an account in your name, so freezing all three gives you full protection.
Shawn Pyles: Tak, я чуў, what gives you credit to enable in medin-dvuh ofisah troch, in dvizheniya ад того каблюция дны отчиненимы на ночь, зачиняючи отражение. You pa-pa-astantъesь ўразливімі, and I can jemjashacca.
Amanda Barozu: It's a very reasonable analogy indeed. It makes sense, especially now, to be able to build your credit online, and I'm sure we'll talk about how we can do that later, but it won't take you a whole day to do it. So you might as well, once you get all your information, sit back, get rid of all three at once and you'll be fine.
Liz Weston: However, we should mention that there are other types of personal data theft that a credit freeze cannot prevent. Один од их - mahlyarmat from vgurannem taksov. This is where someone uses your information to obtain false tax returns. Our W-2 listeners broke down, so they might want to go the extra step and get a PIN code IP. This pin is for personal protection. You will receive it from the IRS. This is a six-digit number that prevents others from filing tax returns on your behalf.
In addition, credit blocking does not protect against criminal identity theft, if someone is arrested and transfers your information instead of their own, or against medical identity theft, if someone uses your identity or medical insurance to receive treatment. Perhaps most importantly, credit blocking does not protect you from the most common type of credit fraud, namely from capturing an account when someone uses your credit card, for example, for fraud charges. .
Amanda Barozu: I don't think that the question of freezing loans is a full guarantee. Тут не проста проста дарваць руки ад руля и не выраткаць на какуть, якы ў вас назад јесть. I think that our listeners here are very reasonable, paying attention to the fact that this envelope is parvany, right? Не проста падмятов, таму что, ой, я грумент, что пастальён был бильно грубы з поштай. Маўляв, не, this is a red flag. I need to pay more attention here. I think it's very important.
Shawn Pyles Зараз давайце пагаровым аб зеходях механихах замарожвання ватор кредиту. Amanda, what kind of information should people have when they want to block their credit?
Amanda Barozu: So, before you sit down to block your credit in all three offices, it would be a good idea to have a few basic things that you probably know by heart, namely your social security number, date of birth, current address. Але кали вы скачать мене шмат пераежалли, вы можете записиста свой представление адрас, кали яны проросяць у вас высо переачезла. Also, it will never prevent you from having your SIM card.
Now you may need different documentation, depending on how you blocked your credit on the Internet, by phone or by mail. So, if you do it on the phone, they may ask you a few more questions, so maybe you'll get an invoice or something to prove your address. Вам также можа программы продажа яго па пай. І from the point of view of these three mechanisms of online freezing, by phone or mail, online freezing of credit is definitely the simplest and fastest method. Another way to do this is without a phone. Па пашал это зойме больш часу, таму майце на часу, что метад, які вы музыкаце, можа чайкаць отрий документации.
Liz Weston: So , they will ask some questions that identify the person, and sometimes they are so vague that it is difficult to answer correctly. So, when you start on the Internet, you will have to do it by mail, because you don't know who you are.
Amanda Barroso: Yes . This is how to get ready for a trip to the DMV. really? I remember when I moved to New York and got my driver's license, I brought the original suitcase with me, full of personal things, because they refused me the first time. У меня не все ў родня Так что знайджите час, збрайте документы. It will be much easier and less unpleasant if you have everything necessary.
Another thing I think is very important to note is that freezing your credit does not affect your credit rating at all, so you can still access your credit report and credit balance with blocked loans. Так что, кали вы тубуються аб цым, кали вы тубаються аб цым, Але хвалюуться, что это можа негативе павляться на ваш крейтинны рейтинг, не хвалюянцы. It doesn't affect me at all.
Sean Pyles: Right . І вы груду може часть что замарожване ваш кредиту патенциина може ваша крейтиннаму бал, таму что меня часть того что что очто описание акутуть на ваша име и не платчить разместу, што позни бал, что можа пашкодиция ваш крейдны бал.
Amanda Barozu: Of course.
Sean Pyles: Now I want to talk about foreclosures versus foreclosures. Яны гучас продажа, але ју ја в компания гучать очень программы. Ци можете вы программы кредитны блок и чим йон из кредитнага блока?
Amanda Barozu: Of course. Такм, як крейдный блокі, так и крейдный блокі автомобиля, и их метал - процеден ваш крейд ад шкоды, але из из из отверше компания кредитные программы, на чий компьютер программы программы, пред чим чим чим чим чим з их им им.
That's why I think it's easier to unlock your credit to start with than to unlock it or unlock it. So, most credit bureaus offer services without credit blocking, and I will talk about these services in more detail. But if you go to the program or to the website of the credit agency, there is usually a big button that you can click to instantly block or unblock your credit. I just checked my credit report on the Experian website the other day, and it looks like this big, big, red button that's really hard to miss.
Another difference, and I didn't mention it, is that the blocking happens instantly, and the unblocking of credits can take up to a few minutes, a little more, if you decide to use the mail. So, maybe, it's important for you, let's say, you travel and decide, I don't know, buy a car, buy a new phone, whatever.
Sean Pyles: Right . Impulsive purchase of a new car.
Amanda Barroso: So ? Oh my God, you just found the perfect car and you need to buy it. You can go to your phone, press the big red button, boom, your credit is unlocked, right? The creditor can make a loan report. Purchase for you.
Ёсць тыпы блакіроўшчыкаў імгненных крэдытаў, якія могуць быць цікавыя некаторым людзям.
Шон Пайлз: Тым не менш, ёсць некаторыя даволі вялікія кампрамісы з замкамі крэдыту, так?
Аманда Барозу: Вядома. Такім чынам, вось два асноўныя недахопы. Першае - кошт. Большасць добрых рэчаў не бясплатныя, нават калі блакіроўка крэдытаў бясплатная, але за паслугі блакіроўкі крэдытаў часта спаганяецца штомесячная плата. Такім чынам, кожнае з буйных крэдытных бюро мае сваю ўласную службу блакіроўкі крэдытаў, якая, хутчэй за ўсё, паспрабуе прадаць вас, так што варта звярнуць увагу на гэта, у той час як блакіроўка крэдыту бясплатная ва ўсіх агенцтвах.
Другая слабасць крэдытнага блока - бок прававой абароны. Такім чынам, крэдытныя блокі не распаўсюджваюцца на федэральны закон, як крэдытныя блокі, таму звярніце ўвагу на кантракты на абслугоўванне. Офіс папярэджвае, што яны не могуць гарантаваць, што паслуга будзе працаваць без памылак або бесперапынна, таму гэта, безумоўна, некалькі рэчаў, пра якія варта падумаць. Зараз у NerdWallet мы раім большасці спажыўцоў блакіраваць крэдыт у якасці меры засцярогі. Такім чынам, у цяперашні час рызыка ўздзеяння спажыўцоў вельмі высокая, таму замарожванне вашага крэдыту з'яўляецца найбольш зручным спосабам абараніць ваш крэдыт і захаваць яго ў бяспецы.
Шон Пайлз: Для мяне я разглядаю крэдытныя блокі як тое, што крэдытныя бюро спрабуюць зарабіць на вас больш грошай, а таксама прадаць вашу асабістую інфармацыю. Простае націсканне вялікай чырвонай кнопкі ў вашай праграме не забяспечвае такую ж абарону, як блакіроўка крэдыту, хоць блакіроўка патэнцыйна крыху больш зручная.
Ліз Уэстон: Ну, і людзі, якія не замарозілі і не размарозілі свой крэдыт, напэўна, не разумеюць, што гэта даволі хуткі працэс. Мне ніколі не даводзілася чакаць даўжэй некалькіх хвілін, перш чым выйдуць мае крэдыты. Такім чынам, вы можаце спачатку паспрабаваць замарозіць яго. Калі вам гэта сапраўды не падабаецца, вы можаце паспрабаваць заблакіраваць яго.
Шон Пайлз: Што да твайго меркавання, Ліз, апошні раз мне трэба было абнаявіць свой крэдыт, калі я падаў заяўку на пазыку на машыну некалькі гадоў таму, і перш чым пайсці ў дылерскі цэнтр, я адкрыў два офісы. , на трэцім чамусьці цёмна. Я падыходжу туды, яны збіраюцца праверыць мой крэдыт і разумеюць: «О, эй, ён замарожаны», а потым я бяру тэлефон і раблю гэта за некалькі хвілін. Неўзабаве я выплаціў свой крэдыт у той час, а потым яны змаглі кіраваць усёй маёй інфармацыяй, і я атрымаў свой крэдыт.
Ліз Уэстон: Так. Пры ўмове, як сказала Аманда, у вас ёсць уліковыя дадзеныя для ўваходу. Гэта важная частка гэтага. Калі вы схільныя прапускаць такія рэчы, гэта можа ўскладніць замарожванне і адтаванне.
Нашы слухачы пыталіся, ці трэба ім разблакіраваць усе тры офісы, калі яны збіраюцца падаць заяўку на крэдыт, ці яны разблакіруюць толькі адным ОК. І адказ у тым, што вам можа спатрэбіцца адкрыць усе тры, таму што вы, верагодна, не будзеце ведаць, якое крэдытнае бюро будзе выкарыстоўваць крэдытор.
Шон Пайлз: Так, давайце больш пагаворым пра замарожванне і адтаванне, бо гэта тое, пра што пытаюцца нашы слухачы. Ці можаце вы пагаварыць пра тое, як нехта можа ўвайсці ў сістэму і разблакіраваць свой крэдыт, калі гэта неабходна досыць хутка?
Аманда Барозу: Вядома. Такім чынам, Шон, прыклад, які вы толькі што працытавалі, так? Прывітанне, usato il portale online, avevi ovviamente le tue credenziali di accesso e poi un pin o una password univoci che hai creato quando hi inizialmente bloccato il tuo credito presso quel particolare ufficio, e queste sono levazioni di cui information. È quello che ti chiederanno.
Per telefono, è più o meno la stessa cosa. Chiamerai il numero dell'agenzia di credito, sarai indirizzato a qualcuno che può aiutarti a sbloccarlo e, come ha detto Liz, nel giro di pochi minuti verrà sbloccato, purché tu abbia quel PIN o password che hai creato. Ovviamente, se vuoi farlo per posta, ci vorrà un po' più di tempo, quindi ti consigliamo vivamente di andare online o di farlo per telefono.
Ora, il problema del blocco e dello sblocco è che le agenzie di credito potrebbero avere piccole differenze o distinzioni nel processo, quindi fortunatamente NerdWallet ha guide che ti guidano attraverso il processo in ogni ufficio.
Liz Weston: Probabilmente dovremmo parlare del processo di scongelamento in termini di durata, perché penso che la gente potrebbe pensare che scongelare significhi, OK, stai eliminando completamente il blocco, ma puoi scongelare il tuo credito solo per un breve periodo periodo di tempo, vero, Amanda?
Amanda Barroso: Torniamo all'esempio di Sean dove sa che comprerà un'auto, sta andando avanti oggi. Quando accede per sbloccare il suo credito, può scegliere un periodo di tempo per scongelare il suo credito, e poi quando quel lasso di tempo è scaduto, boom, quel blocco torna al suo posto, che penso sia una caratteristica piuttosto interessante per qualcuno come io, per esempio, che ho un bambino che corre in giro, che ha le migliori intenzioni, ma potrebbe dimenticare di tornare indietro e ricongelare. Quindi pensandoci come impostare un timer in cui il tuo credito viene scongelato, e poi boom, quel timer si spegne e quel blocco torna a posto. Quindi, penso che sia sicuramente uno strumento che le persone possono utilizzare qui.
Questo è utile anche se stai cercando una casa e sai che alcuni istituti di credito diversi controlleranno il tuo credito, stai cercando di trovare le tariffe migliori, quel genere di cose. Scongelarlo per un certo periodo di tempo quando lo guarderai e poi tenerlo scongelato fino alla data di chiusura della tua casa, ad esempio, e poi congelarlo di nuovo, ti semplificherà la vita.
Liz Weston: Abbiamo rifinanziato il nostro mutuo alcune volte, e le uniche volte in cui ho avuto problemi con un disgelo è stato quando l'istituto di credito ha impiegato troppo tempo per concludere il processo e abbiamo dovuto estenderlo. Quindi, se stai solo richiedendo una carta di credito, probabilmente dovrai scongelare il credito solo per pochi giorni. Se lo stai facendo per una casa, potresti aver bisogno di un periodo più lungo, diciamo 30 giorni o più. Potresti verificare con il prestatore per vedere quanto tempo pensano che il processo richiederà. Ma anche se il blocco torna in vigore, puoi sempre scongelarlo e rendere nuovamente accessibile il tuo credito.
Sean Pyles: Sì. Amanda, you mentioned your toddler a little bit ago and that makes me think about the idea of freezing your child's credit, which I think is something many people might not expect because kids aren't going to be running around with their own credit cards, hopefully, so can you talk about why it's important to freeze your children's credit?
Amanda Barroso: Absolutely. So like you said, I know my daughter isn't running around with her AmEx or whatever. Right? It might seem odd, but here's why it's really important. So, a credit freeze protects minors from having accounts opened in their name that go unexposed for years. So all it takes is for somebody to get their hands on a Social Security number, some other piece of identifying information, and they're opening credit cards in your kid's name. Well, all of a sudden, surprise, your kid turns 18, they've got their first job, they're ready to go and start building their credit, and wow, they have all these fraudulent accounts open under their name and their credit is tanked. Their credit's wrecked before they even have a chance to build it themselves.
So if your kid is under the age of 16, parents can request a credit freeze, and it's still free to do. But the one downside is you're not going to be able to do this online. You're going to have to gather some documentation and mail it to all three bureaus, along with a child freeze request form, and on our website at NerdWallet, we have links to those forms for Equifax and Experian, and then a form letter that we built that you can download for TransUnion.
The other thing that you have to keep in mind is that that PIN or password that you're going to use to freeze your child's credit is going to need to be kept safe for years, more than a decade, even, for my 2½-year-old, so you have to really be mindful about storing it in a safe place like a fireproof safe, or even like a secure password manager if you go the digital route, so that you can access it down the line when it's time to fill out student loan forms or car loans or that first credit card application.
Liz Weston: If you do forget your child's information, though, there is a process where you can get the freeze taken off by mail. It is an extra layer of hassle, but it is so worth it to have the peace of mind. I think it's especially important if you have anyone in your child's life that is not especially trustworthy. There are people who steal a child's credit and just feel like, "Oh, well, I'll manage this credit account better than I have my past ones," the reason why they can't get credit, and they wind up doing the same thing, they can't pay a bill and the utilities get disconnected or the credit card account goes into collections, and it's your kid that pays the price. But there's also synthetic identity theft, which is where they grab random numbers to create phony people, and sometimes they grab the numbers of children who haven't been born yet, the Social Security number hasn't even been assigned. So this is just a great idea. Actually, let me ask you, Amanda, have you gone through the hassle of doing this yet?
Amanda Barroso: No.
Liz Weston: OK.
Amanda Barroso: No, but in preparation for this podcast, you better believe I'm about to get on it.
Liz Weston: All right. Attagirl.
Sean Pyles: Great. Well, Amanda, do you have any final advice for folks who are thinking about freezing their credit but might not be sure if it's worth it?
Amanda Barroso: I think it's always going to be worth it. I think in this particular moment, where our personal information is floating around just because we're doing more stuff online, the more protection and peace of mind that you can give you and your family, the better.
Sean Pyles: Great. Well, thanks so much for talking with us today.
Amanda Barroso: Thanks for having me.
Sean Pyles: Now, let's get to our takeaway tips and I'll start us off. First up, freeze to fight fraud. Freezing your credit profiles at all three credit bureaus is one of the best ways to protect yourself from credit identity theft.
Liz Weston: Next, know how to thaw. You can temporarily unfreeze your credit for a period of time and have it automatically refreeze.
Sean Pyles: Finally, think of the children. If you have kids, freezing their credit profiles can help prevent fraud you might not notice for years.
Liz Weston: And that's all we have for this episode. Do you have a money question of your own? Turn to the Nerds and call or text us your questions at 901-730-6373. That's 901-730-NERD. You can also email us at podcast@nerdwallet.com. Visit nerdwallet.com/podcast for more information on this episode, and remember to follow, rate, and review us wherever you're getting this podcast.
Sean Pyles: This episode was produced by Liz Weston and myself. I edited some of the audio, and so did our regular audio editor, Kayleigh Monahan. Courtney Neidel wrote our show notes, and shout out to the rock stars on the NerdWallet copy desk for all their help. And here is our brief disclaimer, thoughtfully crafted by NerdWallet's legal team. Your questions are answered by knowledgeable and talented finance writers, but we are not financial or investment advisors. This Nerdy info is provided for general educational and entertainment purposes, and may not apply to your specific circumstances.
Liz Weston: And with that said, until next time, turn to the Nerds.
The article Smart Money Podcast: Money Procrastination, and Unfreezing Credit originally appeared on NerdWallet.
Post a Comment for "Smart Money Podcast: Money Procrastination, And Unfreezing Credit"