Bay Realty Blog: What You Need to Know About Credit Freezes When Buying a Home

What You Need to Know About Credit Freezes When Buying a Home

This is very good information for those who Froze your credit during the Equifax debacle!

Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi  gives you everything you need to know about the process to unfreeze your credit permanently or temporarily while you buy your new home!

 

Speaking of Freezing it was 51 below in Tok Alaska Sunday

38 degrees below in Fairbanks Alaska yesterday

and 15 degrees in Balmy Homer Alaska today!

They call Homer the banana belt of Alaska!!

 

 
 
What You Need to Know About Credit Freezes
When Buying a Home
 
 
Currently, I'm working with clients that had chosen ... prior to their mortgage application ... to place a Credit Freeze on their credit file and credit accounts ...

They had decided to take that action after the discovery of 2017's major Equifax Credit Breach.  In that breach, hackers gained access to consumer's Social Security numbers, names, addresses, and birth dates.  

In a number of cases, these hackers also stole driver's license numbers, as well.  And in a much smaller number (but still sizeable), other varying identity info was also stolen during that breach.  

Pretty scary stuff when you consider the huge number of people that conduct personal banking and business online via their computer or cell phone.  Their decision (and many others) to place a Freeze at that time is pretty understandable.

But what security protections are actually found by consumers like my clients when they place a Credit Freeze on their credit file/credit accounts?  
 
First, it's important to know:

  1. What a Credit Freeze is  
  2. What it will and will not do regarding access to your personal financial and credit information 
  3. How (and where) protections are put into place via Credit Freeze  
  4. If it's ever prudent to remove a Credit Freeze, either permanently or temporarily

 

A Credit Freeze:

  • Is a tool that restricts access to your Credit Report
  • Is NOT the same as a Fraud Alert
  • Does NOT affect your Credit Score
  • Does NOT limit your ability to receive your Free Annual Credit Report
  • Makes it harder for identity thieves to steal and use your personal information to open new credit accounts in your name.  

      Remember:  It's still vitally important that you continue to monitor your current existing accounts for irregularities, errors, and fraud.    

  • Thanks to the Economic Growth, Regulatory Relief, and Consumer Protection Act, placement of a Credit Freeze no longer has a small fee associated with it.  Neither does the lifting/removal or "thawing" of a Credit Freeze.
  • Must be placed at each of the 3 Major Credit Bureaus (ExperianTransUnionEquifax.  Each Bureau requires that you set-up an account, perhaps requiring a PIN.)
  • Does NOT apply to your current creditors.  They (and their designated agencies, such as debt collectors) remain able to access your credit info/report
  • May not apply to other governmental agencies in instances such as subpoenas, warrants, etc.
  • Does NOT protect you against everything, such as fraudulent activities perpetrated as a result of information gained through other means, i.e. stolen Social Security Numbers/Cards, etc.

 

If you decide to place a Credit Freeze, you must be prepared to provide all/some of the following info:

       *  Your Name

       *  Your Date of Birth
       *  Your Social Security Number
       *  Your Address

       *  Possibly other personal info

        
A Credit Freeze can be permanently removed from your credit file and credit accounts.  But it's also possible to remove a Credit Freeze temporarily or for specific inquiries or designated periods of time.  

 

My mortgage clients provide a good example of when it's necessary and wise to lift or remove (sometimes called "thawing") a Credit Freeze.


By temporarily lifting their Freeze, they made it possible for their mortgage process, including the running and examination of their credit and credit history, to proceed smoothly and in a timely manner.  

 

It's prudent to point out here that the Credit Freeze lift/removal must be in place at 2 points during the mortgage process.  First for initial credit run and inquiry for Approval and Application ... and then again just prior to Closing, as most lenders run a second credit check within 10 days of Closing.

In my clients' circumstance, that was the reason for our conversation together over the past weekend.  My call contained a reminder that the Credit Freeze lift/removal would need to be in place for their required upcoming Closing credit check.  It was something they were more than happy to hear and see to.

Other instances where a lift or removal of a Credit Freeze might be needed are:

  • During a new employment application. Some employers conduct a credit check of applicants at this time.  (If your potential employer is performing a check, it might be helpful to find out which if the Credit Bureaus they utilize for this purpose.  Otherwise, you will need to lift the Freeze at all 3 Credit Bureaus)
  • Application for service with a Utility Company
  • Application for service with a Cell Phone Company
  • Renting an apartment or home
  • Application for new credit
  • Application for a new credit card 

 

Remember the old saying, "Timing is Everything"?  It definitely applies when considering the lift or removal of a Credit Freeze.
 
Why? 
 
A lifting/removal can take as little as minutes ... or days.  So make sure you know and understand the time allotment needed to ensure a swift and favorable outcome for yourself.
 
This is also an opportune time to highlight 2 things of great importance.  It remains vitally important that you: 
  1. Not develop a sense of false security regarding your Credit Freeze
  2. Make it your habit to check your Credit Report on a consistent basis.  (I recommend that you check your Credit Report for accuracy, at a minimum, once per year.)  

 

It's especially important to check your credit and monitor your accounts prior to applying for a mortgage loan.  I urge anyone hoping to buy or refinance a home to do so well before making application ... at least 6 months to a year.  Note:  Having a proactive credit/financing conversation with me at this time is also a very wise action. 
 
Placing a Credit Freeze on your credit file/credit accounts can be a helpful tool in the prevention of credit fraud.  But the pros and cons, as they affect you and your personal credit, must be carefully weighed prior to taking action.
 
Should you have questions regarding any of the above ... or should you need answers or assistance with New Lenox - Chicagoland/IL - WI mortgage financing, please do not hesitate to reach out to me.  I'll be happy to assist ... 
 
 
* Looking for financing answers, options, solutions, and experienced assistance? 
 
Are you hoping to Buy, Refinance or purchase an Investment Property in New LenoxWill County, or elsewhere in the Chicagoland area? 

Contact me!  I'll put my 40+ years of Mortgage experience and expertise hard to work on your behalf.
I'm easily found at:


Gene Mundt
 
Mortgage Originator -NMLS #216987 - IL Lic. 031.0006220 - WI Licensed
 
American Portfolio Mortgage Corp.
NMLS #175656
 
 
Direct: 815.524.2280
Cell/Text: 708.921.6331
eFax: 815.524.2281
 
 

 

  

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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

NMLS #175656

 

Gene Mundt, Mortgage Originator,  40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking:  #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin. 

 

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Comment balloon 7 commentsDebra Leisek • January 09 2019 08:26AM

Comments

Good morning, Debra Leisek great choice for a reblog.... and I had to read the portion about your current temperatures twice.... then I remembered by college days in Houlton Maine ( Andrew Mooers | 207.532.6573 country!!) and I DO remember 30 below.... never 51 below.... I hope everyone has a very large and powerful wood burning stove with many cords of wood ready to burn.... 

Posted by Barbara Todaro, "Franklin MA Homes" (RE/MAX Executive Realty ) 6 days ago

Good morning Debra. Don't like your weather report, but it does make me feel better about the Chicago cold snap today. As for Gene, he is always full of great information and explains it well. Enjoy your day!

Posted by Wayne Martin, Real Estate Broker - Retired (Wayne M Martin) 6 days ago

Hello Barbara Todaro  Even with the cold the day was just beautiful! Unbelievable Sights to see today! The ocean was a blue as can be and the mountains covered with snow were sparkling! As they say up here there is no bad weather just bad gear! We are keeping Warm!! Thank you!!

Hello Wayne Martin Chicago can get cold and the wind makes it worse! At least we had sunshine and it was so pretty!  And you are right Gene is always worth reading!!

Posted by Debra Leisek ( Bay Realty,Inc Homer Alaska) 5 days ago

Temperatures have dropped to the upper teens here in Chicagoland too, Debra Leisek ... but we're not keeping up with you Alaskans!

I so appreciate you sharing this info with your readers.  Thank you.  I hope that it provides them helpful info or motivates them to talk to their lenders early in the process should they have a Credit Freeze on their accounts.

Stay Warm!

Gene

Posted by Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi, 708.921.6331 - 40+ yrs experience (NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656) 5 days ago

I appreciate your posts that really help us all! I would love to do a loan with you!! You stay Warm too!  Thank you Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi 

Posted by Debra Leisek ( Bay Realty,Inc Homer Alaska) 4 days ago

Debra an awesome re-blog from our friend Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi  must admit I got a bit distracted with your Temperatures I am so sorry that you have such colds and I have no right to complain.. about our plus 52-56 temps at night...Endre

Posted by Endre Barath, Jr., Realtor - Los Angeles Home Sales 310.486.1002 (Berkshire Hathaway HomeServices) about 8 hours ago

Good morning Debra - I am glad you live in a balmy area.  Gene gives use great information on credit.

Posted by Grant Schneider, Your Coach Helping You Create Successful Outcomes (Performance Development Strategies) 2 minutes ago

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