Credit freezes are one of the most effective tools against ID theft available to consumers. A credit freeze allows you to seal your credit report and it can only be thawed if you use a PIN (personal identification number) that only you know so that a legitimate application for credit and/or services can be processed. It is an added layer of security to prevent thieves from establishing new credit in your name.
Recently the three major credit bureaus (Equifax, Experian, and TransUnion) adopted rules that allow a consumer to place a credit freeze on their account for a small fee. However, if you have been a victim of identity theft, the credit freeze service is free. In most states the cost ranges from $3.00 to $10.00 per person. If you want to thaw your credit report for one creditor to get your report or for a specific amount of time - say when you are car shopping- the fee ranges from $0 to $10.00
You can also put a credit freeze on your children's account.
In a previous blog post, I provided web links to pages on web sites published by Equifax, Experian and Trans Union dealing with security freezes. In that post, I noted that relatively few people have taken advantage of their credit freeze rights - some 50,000 credit freezes were entered, while there were over 10 million cases of identity theft.
Clearly, not a lot of information about credit freezes is getting out. I first heard the term "credit freeze" on a radio show hosted by a local consumer advocate. I have mentioned the concept to several of my clients, but no one has heard of it. What exactly is a credit freeze and how does it work?
Back in November, 2007, Credit Law Network blogger Eugene Melchionne posted a report on this blog about credit freezes. Gene noted that as of November 1, 2007, residents from every state in the union could place a security freeze on their credit file, thereby offering some protection against unauthorized use of credit in the event of an identity theft or the theft or loss of credit cards.
Credit freezes (called "Security freezes" by the credit reporting agencies) go a long way to stop identity theives from using your good credit to create bogus accounts that can tie up your time for months. Here are direct links to the security freeze sections of the major credit bureaus:
Equifax - placing a voluntary freeze on your account
Experian - requesting a security freeze
Trans Union - eligibility for a security freeze