Credit Report Freeze

A credit report freeze is one of the best tools available to consumers today to help them prevent financial or credit identity theft. However, a credit freeze has offers some limitations and disadvantages. In this article, we will discuss the process for placing and lifting a freeze on your credit reports with the credit reporting agencies as well as the plus and minuses of a credit freeze.

Lets’ first discuss what a credit freeze is. As you can probably guess from the name of this identity theft protection service which the credit reporting agencies offer by law in all the States, a credit report freeze, also known as a credit freeze, security freeze or credit lock, allows an individual to prevent the sharing of his or her credit report information with creditors for as long as the freeze is in place and not lifted by the credit information owner, the consumer.

Credit freezes are now viewed as the most effective way to prevent financial identity theft when compared to fraud alerts because a credit freeze prevents sharing credit information for making credit decisions, however, a credit fraud alert only warns a creditor about the potential risk of identity theft which is often overlooked by businesses. It is important to note that a credit security freeze will prevent the fraudulent opening of new accounts which is about 15 percent of all identity theft cases because creditors request a copy of the credit reports to review and approve the new account or credit limit request and when their request is rejected because of the credit freeze, they are unable to make credit decisions until the security freeze is lifted and the personal credit information becomes available. All other existing accounts will still remain vulnerable to identity theft which will require a comprehensive identity monitoring service to detect identity theft.

As mentioned earlier, a credit security freeze has advantages such as the prevention of new credit accounts or modification of existing accounts whereby a credit report is required. Such cases include a new loan, credit, mortgage, insurance, government services or payments, rental housing, employment, investment, license, cellular telephone, utilities, digital signature, Internet credit card transaction or other services, including an extension of credit at point of sale. However, a credit freeze is not for everyone as placing and lifting credit freezes cost money unless the credit report owner can demonstrate he or she is a victim of identity theft in some States by providing an official police or DMV report. Therefore, if you regularly apply for loans and other transactions which require the sharing of your credit report, a credit freeze may not be the right choice for you. A good use of the credit freeze is when it is applied to children because minors do not apply for loans however they are increasingly highly vulnerable to identity theft.

For details regarding credit report freeze details by State, click this link.

Placing a Credit Report Freeze

A credit freeze must be placed with each of the credit reporting agencies which makes it even more expensive considering the cost of freeze placement and removal for each credit transaction that requires a credit report. As mentioned, it costs money to place or temporarily and permanently lift a credit freeze unless you are a victim of identity theft who can receive the service at no charge in some States. Individuals over 65 years old may also qualify for a discount. When you place a security freeze on your file, you will be provided a personal identification number or password to use if you choose to remove the security freeze from your file or authorize the temporary release of your credit report for a specific person or period of time.

Also, below you will find the links to all three major credit reporting agencies for placing or lifting a credit security freeze:

Experian Freeze Center

Equifax security Freeze

TransUnion Security Freeze

Identity Theft Courses