What is a credit freeze?
Also known as a security freeze, this tool allows you to restrict access to your credit report, which in turn makes it harder for identity thieves to open new accounts in your name. In fact, most creditors need to see your credit report before approving a new account. If they can not see your file, they can not extend credit.
Keeping your credit report available to retailers, landlords and potential employers means that it is also available to identity thieves.
Why do they want? For one thing, so they can see if you have unused credit card accounts. If so, it is a simple thing for a skilled thief to submit a change of address to the transmitter card and start using your card without your knowledge.
And of course, a thief with your identity can do all the usual things that trigger a credit check. For example, they can borrow money to buy a car or open a new credit card account in your name; they can rent a house in your name; and they can apply for a job using your good credit.
The advantages of a credit freeze are obvious, so what are the disadvantages? Primarily, you have to plan ahead if you want to use your own credit. instant credit for an unexpected purchase will not be possible. Of course, this could be a good thing for consumers who are trying to reduce impulse buying.
It can also be expensive if you freeze and thaw regularly.
Currently, each office charge of $ 10 each time you freeze or thaw your credit report, but consumer advocates are working to reduce this tax. Ed Mierwinski, the US Public Interest Research Group calls for a single fee of $ 5 or less, saying it should be like a security lock on your house. You buy once and use it free of charge.
If you have already become a victim of identity theft, the fee is waived.
Freezing your credit report prevents this, and since last November, there is an option available to consumers from all 3 major credit bureaus. Each office has different systems for freezing a credit report. Equifax and TransUnion require a written request, but consumers can place a freeze with Experian by going on line.
To defrost your Experian report to you can call, write or go online, while Equifax provides a toll free number and TransUnion accept a temporary thaw by phone or mail, but a permanent thaw must be requested in writing.
A credit freeze should not be confused with a fraud alert, which can be placed on your credit report files without charge, but lasts only 90 days. This is a safety feature for those who have lost a wallet or who otherwise fear that their identity was compromised.