How Freezing Your Credit Report Protects You From Identity Thieves

According to the March 5th, 2013 release by the Federal Trade Commission (FTC), identity theft was the #1 consumer complaint in 2012.  In addition, the FTC’s February report states that nearly one in four Americans have an error on their credit reports that is significant enough to prevent them from obtaining a loan or certain types of employment. The best method for combating identity theft is to check your credit report at least, once a year. It is free through www.annualcreditreport.com and you can view all three reports, every twelve months.
Another option for safeguarding your identity is to place a credit freeze on your credit reports. A credit freeze prevents the credit bureaus (Equifax, Experian and TransUnion) from releasing your credit report without your specific permission. This means no one will be able to open a new account in your name.
The freeze works like this:
  1. You contact the credit reporting agency to place the freeze on your file. At that time, you will receive or create a personal identification number (PIN). That PIN will be used to unfreeze the report if a creditor or other third party needs to review it.
  2. If a business you authorize needs to access the report, you contact the credit reporting agency and ask them to lift the freeze. You can lift it temporarily or permanently.  You will also need to verify your identity and in some cases, provide a notice stating how long you would like the report to be available and to whom you want the report sent.
  3. The freeze does not interfere with the accounts you already have nor will it will not stop a thief from using an account they have already stolen.
  4. Freezing your credit report does not affect your ability to receive a free copy of your report through www.annualcreditreport.com.
Freezing a credit report can provide peace of mind that no one is using your credit. You will know who is accessing your report and when. However, there are several items to consider before placing the hold. These include:
  • The cost to lift or place the freeze. This varies from state-to-state and averages about $10.
  • How often you need to access credit. Lifting the freeze is necessary for transactions such as opening a new bank account, obtaining cell phone service, opening a new credit card, renting a home or apartment or obtaining any loan.
  • The time involved in managing a frozen account. It can take up to three days to lift or temporarily “thaw” a credit freeze.
You can locate state rules for credit freezes by visiting the three major credit bureaus (Equifax, Experian and TransUnion) and searching for “credit freeze.” For more information on protecting your information from identity thieves, visit our website.