How Does A Credit Freeze
Protect You?

A fraud alert or credit freeze, sometimes called a 'frog flag', are two major tools you can use to provide substantial protection against identity theft.

Using a credit freeze for credit cards is good protection against identity theft.

The first of November, 2007, consumers in America were given the ability to limit access to their individual credit reports by all three credit reporting agencies.

A credit agency puts a flag on your credit report called a fraud alert.

If a person tries to open credit in your name (such as a credit card, cell phone, house loan, car loan, etc) the creditor, (not the bureau) is supposed to contact you and verify that this particular transaction is something that you want to take place.

If the creditor tries a number of times and still is unable to contact you, the loan should definitely not be made.

Your credit report can still be accessed by lenders.

Click on protection against identity theft and avoiding identity theft for information that will help you stay one step ahead of criminals out to steal your identity.


Fraud Alerts Have Two Types

  • The Initial Fraud Alert-this will stay on your credit report for a full 90 days and can be renewed.
  • The Extended Fraud Alert-this lasts for seven years and is only available to someone who has had their identity stolen.
  • Even though lenders are 'supposed' to contact you and verify the information, this does not always happen.

The law does Not require them to do so, only to have "reasonable procedures and policies".

On the other hand, I believe a credit freeze is even better. A freeze puts a lock on your file and is technically off limits to anyone applying for credit in your name.

  • When you apply for a loan, credit card, etc, the company that is issuing the credit must contact one of the credit bureaus and ask to see your credit file.
  • The company will be told they cannot have access to your credit file because it has a freeze on the account.

Most companies will not issue a credit card, or allow a loan.

  • A personal identification number is assigned to you by the three credit bureaus at the time you freeze your accounts.
  • When you use this PIN number, you are able to lift the freeze when needed.
  • The credit report freeze does provide considerable identity theft protection, but also has a couple of drawbacks.
  • Non-credit-related forms of identity theft such as making a duplicate driver's license or criminal identity theft (when a person is booked for a crime and gives your name) cannot be stopped.

The majority of companies will be stopped from accessing your credit report.

Existing lenders from your home mortgage company, credit card companies and any collection agencies that represent any of your current lenders, will still be able to offer new credit offers and view your reports.

Go to stop junk mail to stop receiving junk in your mail.

  • It also won't stop an undocumented worker or illegal immigrant from using your Social Security Number to obtain employment

I still think, for the most protection, a credit freeze is the way to go.

All in all, I think you're better off doing this, than doing nothing at all.

So that you can understand the difference between a Security Freeze and a Fraud Alert, click http://learn.equifax.com/credit/fraud-alerts/ for an explanation of both.

You want a Pro-Active rather than a Reactive solution to the identity theft problem.

  • Pro-Active-you can take care of the credit freeze yourself and watch all your credit reports for any signs of identity theft at no, or low cost or...
  • ...you can look for protection from one of the reputable companies that deal with identity theft for you, such as; TrusteID, Identity Force or Life Lock.
  • Reactive-means you find out your credit has been compromised After it has happened.

Fortunately, as of November, 2007 most states have implmented the credit freeze law.


States That Allow A Credit Freeze (alphabetic order)

  • Alaska
  • Arizona
  • Arkansas
  • California
  • Colorado
  • Connecticut
  • Delaware
  • District of Columbia
  • Florida
  • Georgia
  • Hawaii
  • Idaho
  • Illinois
  • Indiana
  • Iowa
  • Kansas
  • Kentucky
  • Louisiana
  • Maine
  • Maryland
  • Massachusetts
  • Minnesota
  • Mississippi
  • Montana
  • Nebraska
  • Nevada
  • New Hampshire
  • New Jersey
  • New Mexico
  • New York
  • North Carolina
  • North Dakota
  • Ohio
  • Oklahoma
  • Oregon
  • Pennsylvania
  • Rhode Island
  • South Carolina
  • South Dakota
  • Tennessee
  • Texas
  • Utah
  • Vermont
  • Vermon
  • Washington
  • West Virginia
  • Wisconsin
  • Wyoming


States That Still Restrict
Credit Freezes:

Alabama, Michigan and Missouri are the 3 states left that has not passed a law requiring the credit freeze.

Starting November 1, 2007, Equifax, TransUnion and Experian will offer the security freeze voluntarily to residents.


Credit Freeze Instructions For All Three Major Credit Bureaus

  • Normally, when you want to place a freeze on your file, each of the three major national credit reporting agencies (TransUnion, Equifax, and Experian) require you to provide by certified mail, the following information:


TransUnion

www.transunion.com

TransUnion Credit Freeze
P.O. Box 6790
Fullerton, CA 92834-6790

1-800-680-7289


  • Send by certified or regular mail.
  • First name, middle initial, last name, Jr., etc.
  • Current home address and addresses for the last five years, social security number, and birth date.
  • Pay by money order, check or credit card. With the credit card you must give the name of the card, account number and expiration date.
  • If you are a victim of identity theft, you must include: valid copy of the police report, complaint or investigative report filed with law enforcement agency.


Equifax

www.equifax.com

Equifax Credit Freeze
P.O. Box 105788
Atlanta, GA 30348

1-800-525-6285


  • Send by certified or regular mail.
  • Name, current and former address, social security number and date of birth.
  • Pay by money order, check or credit card. Credit card (Master Card, American Express, Discover, Visa only).
  • With credit cards you must give the name of the card, account number and the expiration date.
  • If you are a victim of identity theft, you must include: valid copy of the police report, complaint or investigative report filed with law enforcement agency.


Experian

www.experian.com

Experian Credit Freeze
P.O. Box 9554
Allen, TX 75013

1-888-397-3742

  • Current home address and addresses for the last five years, social security number, and birth date.
  • Two proofs of residency, copy of your drivers license, insurance statement, utility bill, and bank statement.
  • Pay by money order, check or credit card. With the credit card you must give the name of the card, account number and expiration date
  • If you are a victim of identity theft, you must include: valid copy of the police report, complaint or investigative report filed with law enforcement agency.
  • There is usually a small fee that must be paid to each credit bureau.
  • The fee is usually $10. To freeze your credit with the three bureaus would cost you $30.
  • You must unfreeze your credit if you want to obtain credit for some reason.

There is usually a cost to unfreeze it and then a cost to freeze it again.

I know this process is not convenient, but this is a terrific option if you had your personal information stolen or been a victim of identity theft.


Credit Freeze Pros

  • You can still get credit or other services with a freeze.
  • When putting on a security freeze – or taking it off – in most cases, this is free for a victim of identity theft.
  • Imposters can be stopped from opening new accounts in your name with a freeze.
  • Your credit score will not be affected with a credit freeze.
  • The freeze remains in effect until you remove it and does not expire.
  • Freezing usually costs less than paying a monthly fee to a credit monitoring service and provides greater protection.


Credit Freeze Cons

  • A freeze doesn’t stop or prevent fraud when your credit or bank accounts are involved.
  • In most of the states, and depending on where you live, people who are Not victims may pay up to $60 to place a freeze with the 3 agencies.
  • Normally, in most states, a non victim will only pay $30 to freeze the 3 files.
  • Freezes are free for non victims in New York, Indiana, New Jersey and Colorado.
  • Non victims, in most states, pay a fee to temporarily lift or permanently remove a freeze.
  • A few states don’t charge, but normally a temporary lift can cost up to $12 for a non-victim.
  • Your credit application or other transactions can be delayed and make “instant credit” unavailable to you because a security freeze may take up to 3 business days to lift.
  • Some states passed a law that requires the credit freeze to be lifted within 15 min of the request beginning approximately Sept. 2008.
  • In most states a security freeze has to be activated by mail to be effective. It must be done at all 3 credit agencies.

Learn more at identity theft scams and identity theft help.

A credit freeze may not be the best choice for everyone, but can provide protection if you believe you are at risk or if you’re a victim of identity theft.



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