New investment account vs. credit freeze?

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siamond
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New investment account vs. credit freeze?

Post by siamond » Mon Oct 09, 2017 3:50 pm

Say somebody froze his/her credit reports with all the bureaus described in our Credit Freeze wiki page, the big 3, plus Innovis/Chex/Sage.

Now say this individual would like to open a new individual investment account (e.g. brokerage, IRA, etc). Is there any snag here? Would a company like Vanguard, Schwab, Fidelity request a credit report? It seems to me that there is a no 'credit' involved per se, so the answer should be 'no', but then when I opened a business checking account, I know that Chex Systems was queried, and there was no 'credit' involved either. I also read reports of people having some difficulties with CDs when credit reports are frozen.

Does anybody know?

(context, I was helping a friend to move to new low-cost investing accounts, and we discussed Equifax, and it suddenly struck me that my advice to freeze credit reports asap might need to be qualified a bit...)

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dollar_elbow
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Re: New investment account vs. credit freeze?

Post by dollar_elbow » Mon Oct 09, 2017 5:19 pm

Vanguard, Schwab, and Fidelity will all want to check your credit reports to verify your identity when you open an account so you will need to have your reports unfrozen. Schwab may ask you to take documents to a local office if they cannot verify you online.

Online banks such as Ally and Capital One 360 also check credit reports (I don't think they bother with ChexSystems) even if you are opening a savings account or CD where credit is not required.

In my experience all the major firms use a combination of Equifax, Transunion, and Experian credit reports for verification. By all means freeze your report at Innovis, since I have never needed to unfreeze that one.

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siamond
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Re: New investment account vs. credit freeze?

Post by siamond » Wed Oct 11, 2017 4:13 pm

Ok, thank you.

dcabler
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Re: New investment account vs. credit freeze?

Post by dcabler » Thu Oct 12, 2017 11:33 am

Hi Siamond,
I just went through that. I started work at a new company in late July and was awarded some RSU's as part of the offer. After I joined and everything settled, I opened up a new Etrade account since that's what my new company uses for RSU's. But this happened after I froze everything. It caused a small snag, but all they ended up needing was proof that I am who I said I am - they needed a photocopy of my drivers's license, SS card and a few other things. That took care of it and I didn't have to do an unfreeze.

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dollar_elbow
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Re: New investment account vs. credit freeze?

Post by dollar_elbow » Fri Oct 13, 2017 4:50 pm

Opening an account with frozen reports can be hit or miss. Ally, for example, makes it almost impossible to open an account with your reports frozen.

furwut
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Re: New investment account vs. credit freeze?

Post by furwut » Fri Oct 13, 2017 5:09 pm

Ask if they will run a credit check, I think by law they are required to disclose anyway, and with what agency. Request a thaw at that agency.

JohnF
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Re: New investment account vs. credit freeze?

Post by JohnF » Fri Oct 13, 2017 6:56 pm

For what’s worth, last year I opened a Fidelity brokerage account (online) without unfreezing my credit reports. Perhaps the rules are different now.

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jhfenton
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Re: New investment account vs. credit freeze?

Post by jhfenton » Fri Oct 13, 2017 7:36 pm

Last month I froze my credit with the big 3, Innovis, and ChexSystems. This month I opened a new HSA with Lively and an accompanying HSA brokerage account with TD Ameritrade. Neither online system blinked. (I did have accounts at TD Ameritrade from 199x-2015, so maybe I was still in their system.)

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