Should I Unfreeze My Credit During a Mortgage Loan Process?

The Answer is Yes.

All Fannie Mae and Freddie Mac loan originators will require that all three bureaus be unfrozen to allow them to pull from all 3. Many borrowers feel that they should only unfreeze. In their mind that will be enough for the lender to get what they need, Wrong. All mortgage lenders that delivery there loans to the GSE’s will use a tri-pull company to collect the credit report which Equifax, TransUnion, and Experian. When pulling a tri-pull credit report it will show up on your report as a “Hard Inquiry” and not a “Soft Inquiry” A hard inquiry occurs in cases where you check your own credit or when a lender or credit card company checks your credit to pre-approve you for an offer. Soft inquiries do not appear on your credit report and do not impact your credit scores.

Most banks and in-house mortgage bankers (Correspondent Lender) will pull one hard inquiry for the loan process unless the loan is delayed, and the credit expires (Usually 120 Days). Mortgage Brokers may pull a hard inquiry several times during the loan process. Once to get a snap shot of your credit profile and potentially several times when they send your loan file to other lenders to process and underwrite. Who every is closing and funding the loan, they will usually do a soft credit pull the day of closing, just to make sure that the borrower has not opened any new lines of credit and has extended their liabilities.

How long should I keep my credit unfrozen for the loan process?

It would be best to keep it open until the day of closing, but the lender cannot advise you on this. If you choose to freeze your loan immediately after the lender does an upfront pull, you might want to ask your loan officer or loan processor when you unfreeze it before closing to not delay the closing of the loan. Heavier users of credit freezes could create more complications and delays when people with frozen files apply for mortgages. Most lenders say dealing with applicants who keep their files in frozen during as much of the mortgage process as possible can be challenging.

How to Unfreeze Your Credit Report

If you want to unfreeze your credit, you have to do it separately for each of the three major credit bureaus (Experian, Equifax and TransUnion). You will most likely want to re-freeze your credit information in the future. The reasons can range from applying for a new credit card, getting a mortgage or signing up for a cell phone contract to buying a new car, applying for insurance or applying for a job where the employer wants to check your financial background.

Because you establish your credit freeze with each of the three credit bureaus individually, you will need to unfreeze them at each bureau as well. Here are the quick links to each of the bureaus:

https://www.experian.com/ncaconline/removefreeze

https://www.freeze.equifax.com/Freeze/jsp/SFF_PersonalIDInfo.jsp

https://freeze.transunion.com/sf/securityFreeze/landingPage.jsp

You have two options for unfreezing your credit reports:

Temporary lift: This allows creditors to check your file for a set length of time, then restores the freeze.

Permanent removal: This leaves your reports open until you request another freeze.

To unfreeze your credit, you’ll need to use the secure PIN, or personal identification number, that you received when you originally requested a freeze. In most cases, if you make the request online or by phone, the credit bureaus can lift a freeze in as little as 15 minutes, although the Federal Trade Commission gives them up to three business days. If you lose your PIN, you’ll need to contact each bureau individually to either request a new PIN or permanently lift your freeze.

Starting Sept. 21, credit-file “security” freezes will no longer cost you money. For years, you had to pay fees that varied from state to state to enact freezes, which nail down your credit files, rendering them inaccessible not only to crooks but to just about everybody else unless you unfreeze them. In the wake of the Equifax debacle, consumers spent an estimated $1.4 billion on freeze fees, according to researchers.

Congressional legislation this year removed that cost barrier and set some new guidelines for the credit bureaus and consumers, thereby opening the door to much wider use of the tool. This should be good news for home buyers and owners because, on average, they tend to have greater assets and larger numbers of credit accounts to protect than others.

Bottom line: If you opt for free freezes and plan to get a mortgage, play it smart: Be ready to unfreeze your credit files at least twice during the process, or simply unfreeze for the duration. I have done this exercise many times in the last year and doing online is quick and easy.