Announcing The Winner of Our Financial Literacy Scholarship (Spring 2022)
We are awarding $750 to a student every semester. All you have to do is show us how financial literacy has made a difference in your life.
Identity theft is a scary thing to think about. Thousands of Canadians fall victim to identity theft every year, and some have even lost their entire savings as a result. With emerging technology, hackers are getting better and better at accessing your personal data. Luckily, a credit freeze is a great preventative measure in stopping fraudsters from creating false credit accounts in your name.
A credit freeze, also known as a security freeze, is a freeze of access to your credit report and file. If a fraudster steals your information and decides to open a new credit account in your name, a credit freeze prohibits the credit bureau from sharing your credit information or personal data with anyone, which would likely deter a lender from lending to the fraudster.
Credit freezes are especially important during data breaches. If a bank, financial service provider, or even the CRA experiences a data breach, you might be at risk for hackers and fraudulent activity.
Unfortunately, however, credit freezes don’t stop fraudsters from accessing your existing credit accounts, or from conducting any other credit activities that don’t require a credit check.
Unfortunately, you cannot freeze your credit report or file in Canada. Despite the 218% increase in fraud in Canada between early 2020 and early 2021, most Canadian provinces and territories haven’t introduced legislation for credit freezes. Credit freezes are more common in the United States.
The credit freeze process is quite simple – just follow these 4 steps:
A credit freeze is an easy process that offers many benefits:
A credit freeze makes it difficult for someone to fraudulently create a credit account in your name. When you, or an imposter pretending to be you, apply for a loan, lenders will often request credit information from credit bureaus. If you request a credit freeze beforehand, the credit bureau won’t share any information with the lender. Credit freezes make your credit report secure. And, without that important credit information, a lender will likely not lend or authorize a new credit account to a fraudulent individual.
Credit freezes used to cost a fee; however, credit bureaus are now legally required to offer credit freezes free of charge.
Once you successfully request a credit freeze, you can rest easy. Credit freezes don’t expire, so they remain in effect until you decide to lift them.
Credit freezes don’t hurt your credit score, or your ability to use your current credit accounts.
A credit freeze might help you think twice before applying for a third, fourth, or fifth credit card. The time it takes you to lift the freeze (20 minutes) might give you time to reconsider an impulsive decision.
Make sure you consider all the drawbacks of a credit freeze before taking action.
Credit freezes aren’t guaranteed to be 100% effective in preventing scammers from opening new credit accounts in your name. Additionally, credit freezes don’t help you protect credit accounts that are already in your name.
You must get in touch with each credit bureau to not only request a credit freeze but also to lift or delete the freeze.
Credit freezes require planning. If you are thinking about opening a new credit account, such as a mortgage or credit card, you’ll have to plan for extra time in requesting a lift on the freeze.
If you’re a Canadian and want to protect yourself from fraud, there are other actions you can take.
You can sign up for fraud alerts with either TransUnion or Equifax. Equifax also offers an Identity Alert, which requires lenders to call you before offering credit after a credit check. Both bureaus allow you to request alerts via phone, online, or email.
If a lender sees a fraud alert on a potential borrower’s credit file, they are legally obligated to take reasonable steps in verifying someone’s identity before lending them money.
Don’t overshare personal information like your birth date, address, or family members’ names on social media. Additionally, safeguard your personal information, especially if you have acquaintances or strangers in your home.
Credit monitoring is similar to a fraud alert. Credit monitoring notifies you if there are any changes to your credit reports. Although you can monitor your credit reports by manually examining them on your own, credit monitoring helps you remember, and encourages you to check when it really matters. This helps give you a push in checking your credit accounts for the alerted change, and helps you catch fraudulent activity early.
Some changes you might be alerted of include:
Credit monitoring isn’t a fool-proof preventative measure to identify theft. Before applying for credit monitoring, remember its limitations:
Go through your credit card bills each month to find any unfamiliar transactions. Additionally, make sure you call your creditor immediately if you don’t receive your bill. This is often a sign of fraud, since fraudsters often try to change contact information to hide their activities.
Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.
Whether you have good credit or poor credit, building financial awareness is the best way to save. Find tips, guides and tools to make better financial decisions.
We are awarding $750 to a student every semester. All you have to do is show us how financial literacy has made a difference in your life.
Almost $500 in commission-free trades. Code “50TRADESFREE”. Conditions apply.
Borrow $500-$50,000 from Fairstone by May 31 and don’t pay until July.
Build credit while spending money with the Refresh Financial VISA card.
With KOHO’s prepaid card you can build a better credit score for just $7/month.
Check out our interview with addy; a platform that allows Canadians to invest in different properties across Canada with as little as $1.
All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.
When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.
Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.