Active-duty military members are given a number of financial protections that average consumers aren’t privy to, and this week the major credit reporting agencies added one more perk to that list — free credit freezes.
The move was announced Wednesday in a release from the Consumer Data Industry Association, a trade group that represents the major credit reporting agencies. Experian, Equifax and TransUnion are all participating in offering free credit freezes for active-duty military, which will roll out in the first half of 2018.
Freezes are a tool used for identity theft victims to stop their credit from being used without their permission. It essentially blocks anyone from opening new lines of credit using the consumer’s identity, unless the consumer has the freeze temporarily lifted or removed.
“Given the nature of the military lifestyle, with frequent location moves and overseas deployments, these brave men and women, and their families, may find it particularly challenging to address an identity theft situation,” said Eric J. Ellman, Interim President & CEO of CDIA.
Placing, lifting or removing a security freeze can cost up to $10 each time, depending on the state you live in and the bureau offering it. Active-duty military members already can place a one-year credit alert on their file for free, though this will not stop a new application for credit by default like a freeze would. The alert just requires the lender or creditor to take extra measures to ensure the applicant is legitimate.
Identity theft can do major credit score damage both upfront and in the long term. An identity thief with enough information to apply for credit in your name can make a bunch of applications for credit in a short period of time before you notice the theft. That will cause an immediate drop in your score by inflating your inquiries. And if the theft goes unnoticed, any new accounts that they’ve opened will go without payment, sinking your score even more.
The move by the bureaus to offer free credit freezes is especially important when you consider the long-lasting impact of identity theft on military members and veterans. Buying a home, getting credit cards, even starting a business (9% of U.S. businesses are veteran-owned, according to the Small Business Administration) are extremely difficult to do with a bad credit score, and identity thieves with personal information like your Social Security number can lie in wait for years since these numbers rarely change, hurting servicemembers long after the theft has occurred.
The best protection against identity theft is vigilance. Keep an eye on your credit reports and scores, checking for signs of identity theft. (You can check your business and personal credit scores for free on Nav.com.) Keep your personal identifying information on lockdown. And if you still find your information being used fraudulently, credit alerts or freezes can help keep you safe.
This article was originally written on April 3, 2017 and updated on January 30, 2020.