Beware of the Freeze

As the popularity of consumer credit freezes continue to increase, expect another credit related hurdle to materialize frequently.  With the rates of identity theft rapidly rising over the years, many victims as well as cautious consumers have elected to freeze their credit reports as a preventative measure.  This freeze makes the credit report irretrievable until unlocked by the consumer.  The benefit to the consumers is simple: no access to credit reports equals no new credit cards, auto loans, etc. being opened. This protects current victims from having increased problems and exposure and protects the proactive consumers from having loans and credit cards opened in their name, without them knowing.

Consumer’s access to control the freezing and “thaw” of their own credit has become increasingly simple—with some credit bureaus, that is.  With a few clicks on a smart phone, a consumer using Equifax’s TrustedID service has nearly instant access to lock and unlock their credit report.  It takes a matter of moments.  Some of the other bureaus are not quite as user friendly as TrustedID, but by completing a short form with identifying information, someone should be able to unlock their credit reports relatively easily.  Once unlocked the reports are generally available within an hour for credit inquiries.   

So now, in addition to worrying about what a client’s FICO score may come back at, you have to worry about whether or not you will be able to pull any score at all.   A great question to ask – preferably before the customer is even taken to the F&I office is “Is your credit frozen?” or “Do you need to unlock your credit?”  Some savvy individuals may have this taken care of already, knowing they intend to purchase a vehicle using credit.  Some may not even recall that they locked it, most will not be aware of how to go about unlocking it.  

In addition to asking consumers if they need to unlock or ‘thaw’ their credit early on in the sales or F&I process, it can be helpful to verify which credit bureaus your dealership uses, so you can let the customer know which bureau(s) they need to unlock.  It is also helpful to familiarize yourself with the bureau’s websites.  The bottomline is that credit freezing can be a powerful protection tool for consumers but can also become a hinderance in the F&I office.