Should you freeze your credit report?

Your credit score is an important tool that lenders will review when determining your ability to make repayments on debts.

However, as personal data breaches and hacking become more prevalent, it’s important to understand what tools you have to keep your personal details safe in case of any potential scam activity.

What happens if I freeze my credit report?

If you suspect that you've been, or are likely to be, a victim of fraud, the first thing you should do is report it to the right authorities.

Then, one of the things you can do is request a ban, or freeze, on your credit report.

Taking this action will prevent credit providers from accessing your credit report as part of a credit check.

While the freeze is in place your credit information cannot be disclosed by a credit reporting body. Credit providers won’t be able to see credit reporting information without your written permission.

The freeze will be lifted after 21 days, but you are able to extend it for up to 12 months, provided you have the right documentation necessary.

Watch out: It may be worthwhile considering the implications of freezing your credit report. While it could potentially prevent someone from taking credit out in your name, it’s not a guaranteed solution.

Freezing your score may also prevent you from being able to see unusual activity associated with your report.

If you’re considering placing a ban on your credit report it is important to do so with each credit reporting bureau in Australia, which are Equifax, Experian and illion.

What else can I do to prevent identity theft?

It’s more important than ever to be wary of who has access to your personal information and how secure it is.

Don’t offer up any personal details to people you don’t know or trust. Double check the validity and authenticity of any organisation that requests your information. This includes social media platforms, banks, telco networks, utility companies, mobile apps and more.

Check your bank account regularly and report any suspicious activity. Same goes for your credit score.

Performing regular credit score checks may be a sensible, preventative measure to monitor whether someone has illicitly used your personal information to obtain a line of credit. If your details are used to procure a loan, this may negatively impact your credit rating and borrowing capacity.

Learning your credit score may be one way to identify fraudulent activity and may also encourage you to improve your rating in order to become a more viable candidate for financing.