With the recent data breach at Equifax, a credit bureau company, you may be wondering whether you should freeze your credit report. I am one of the people Equifax has identified as "potentially impacted" by the data breach so I've been pondering my actions.

First, what is a credit freeze?

A credit freeze stops the credit bureau from releasing your credit report or any information from it, except in certain exceptions. For example, companies you currently have loans with and collection agencies can still receive your report.

This means that someone who wants to use your identity to borrow money – even if they have your name and Social Security number, probably won't be able to obtain credit in your name.

What are the advantages of a credit freeze?

• Makes identity theft, which involves borrowing money, much less likely.
• Will not lower your credit score.
• You can still request and see your credit report.

What are the disadvantage?

It may cost you $10 to place the freeze. If you're a victim of identity theft (requires a police report or other documentation) or at least 65 years old, it's free. (These costs may be different in places other than Illinois.)

If you want to borrow money (for example, apply for a new credit card) you have to lift the freeze first. In addition, because credit reports are used by businesses other than lenders, the credit freeze may interfere with other things such as

• changing insurance policies,
• renting housing, and
• signing up for new utilities or phone service.

It will cost you $10 to lift the freeze temporarily or permanently.

It may take up to three business days to lift the freeze.

How do you freeze your credit report?

You must request a freeze at each of the three credit bureaus. Each will charge a fee.

If you're married, you need to freeze both your and your spouse's credit reports to protect your identity.

For detailed information about how to place a credit freeze, go to the Illinois Attorney General's resource, Placing a Freeze on a Credit Report.

What to do?

That's the facts of a credit freeze. Whether or not you want a credit freeze is a personal decision. I'll be writing more about identity theft and how it has affected my family in future posts -- so stay tuned in!

The FTC has issued this statement about the Equifax data breach, and their recommendations, The Equifax Data Breach: What to Do. Take time to read this and consider what you want to do.