What you Need to Know About Credit Freeze

A lot of experts claim that Credit Freeze is the best way to prevent identity theft.

What is Credit Freeze?

Credit Freeze, aka Security Freeze, allows you to restrict access to your credit file.  When the Security Freeze is added to your file, you or anyone else using your name will not be able obtain new credit, because the potential credit grantors will not be able to view your report to evaluate your creditworthiness; hence, they will not be able to extent new credit.

California was the first State to pass a Security Freeze law in 2003.  In 2007, all three Credit Reporting Agencies announced that the consumers could place the security freeze regardless of their state of residency.  As of today, there are 48 states and District of Columbia have Credit Freeze laws.  Alabama and Michigan have not implemented any Credit Freeze laws yet.

Can I place the Security Freeze to my credit file?

All consumers residing in the US, including Puerto Rico, Guam and Virgin Islands, are eligible to place the Security Freeze to their credit file.  It may cost you to request the Security Freeze.  The fee will range from $0.00 to $20.00 per each credit reporting agency.  However, if you are a victim of identity theft, the fee will be waived, but you will have to provide credit reporting agencies with a valid Identity Theft report filed with the Federal, State or Local Law Enforcement Agency.  Also, in some States, if you are 62 years of age or older, you may be able to request the Credit Freeze either for free or for a reduced fee.

Typically, the Credit Freeze stays on your credit file for 7 years or until removed.  However, some states allow the Credit Freeze to stay an indefinite period of time or until removed.

How to request the Credit Freeze

To place, temporarily lift or permanently remove the Credit Freeze, you will have to contact each credit reporting agency individually by phone, online or by mail.

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When submitting your request by mail, make sure to include your Name, Current Address, Social Security Number, Date of Birth, your ID and proof of your current residence (utility bill, phone bill, 1099-Form).  Every Credit Reporting agency supplies you with a list of acceptable documents.  If you are a victim of Identity Theft, make sure to send your Identity Theft Report along with your request.

Upon receipt of your credit freeze request, the credit reporting agency will send you a 10-digit Personal Identification Number, which you will need in the future to temporarily lift or permanently remove the Credit Freeze.

Will I still be able to open new accounts?

In order to open a new account, process a rental application or allow a potential employer to conduct a background check, you have to temporarily lift (“thaw”) the Credit Freeze from your credit file for a specific period of time or a specific third party.

If you choose to lift the Credit Freeze for a specific period of time, any third party will be able to access your credit file.  If you have selected to lift the Credit Freeze for a specific third party, you will be given an access code that you can provide that party with.

Upon receiving your request for a Credit Freeze lift, credit reporting agencies have no more than three business days to grant your request; however, some states had enforced the 15-min rule for a Credit Freeze lift if the request is submitted online or by phone.  You must provide the credit reporting agencies with a 10-digit PIN.

Who can access my credit file?

Your credit report can still be viewed by the companies you already have a current financial relationship with and the collection agencies acting on their behalf.

Also, Child Support Agencies, Law Enforcement Agencies, Governmental Agencies and any other exempt company as allowed by the state law.

You will still be able to get free copies of your credit report.  Visit www.annualcreditreport.com.  By the way, your credit score will not be affected when you place a Credit Freeze on your credit file.

Things to consider

  • The Credit Freeze is an effective tool in preventing new account fraud.  Your existing accounts can still be compromised and misused.  Unfortunately, the Credit Freeze will not prevent any other forms of Identity Theft.
  • The Credit Freeze will not stop pre-approved credit offers.  You may do so by calling The Consumer Credit Reporting Industry Opt-In Opt-Out line (888)- 5-OPT-OUT or (888) 567-8688 or visit www.optoutprescreen.com .
  • When applying for new credit, it may take a little longer to get approved.

Although, the Credit Freeze is not a perfect solution for Identity Theft Prevention, it is a good one for stopping New Account Fraud.  It is a good start!

About the Author

Lana is a real life Identity Theft Victim. Identity Theft Manifesto is a result of her own struggles to clear her credit, her name and reputation. She is on the mission to research, learn more and educate her readers about ID Theft Crime.