Credit Freeze

If you are looking to make your credit information more secure, then a credit freeze is the option for you. Beware though, there are drawbacks.

Each year identity theft and credit fraud become more of a problem. Many times the theft is a quick hit to a stolen credit card number, but there are many instances where the theft goes deeper and a new account is opened in another name or a new address is acquired using the original owners name.

California was the first state to pass laws allowing the credit freeze, but soon after most states have initiated their own rulings on the subject. If you are a victim of identity theft the credit freeze is usually free of charge. If you just want to make your accounts more secure it will cost but the charge is very minimal.

The credit freeze is a state law that generally is considered to provide more protection than the federal credit fraud alerts.

What this action does is bars those trying to view your credit report.

Viewing the credit report is the first step lenders take in extending credit, so this puts a stop to those trying to steal your identity and getting that credit for themselves.

What the credit freeze will not stop

  • The credit freeze won't stop the criminal that steals your credit card information.

    (those quick hit purchases $50.00 is the limit of responsibility of the card holder)
  • It won't stop someone from stealing funds from your bank account.

You need to be vigilant with your accounts checking them at least weekly as fraud seems to be a regular feature of this economy and a growing problem for the banking industry.

What a credit freeze will keep from happening is the day you find yourself with a mortgage or line of credit that you had no idea existed!!! That could give you a heart attack! The long term circumstances of dealing with correcting that problem would be no joke either.

Some of the drawbacks

    One of the drawbacks though minor when considering the peace of mind this can deliver is that it may take 3 business days to lift the freeze on an account. Though usually if it is a temporary lift and done online it can be done immediately.

    If you are one of those that jumps into credit situations like those at your favorite department store offering you their store card and an additional 10% off for opening, you might not like the wait or the inconvenience of no instant gratification.

    Another area it will affect is a credit monitoring service. If that service is one from outside of the credit bureaus they will need the freeze lifted to access your information.

    A credit monitoring service provided by one of the credit bureaus will be able to access it's own info but if you've opted for 3 bureau monitoring then the other two freezes will need to be lifted. If you have a good monitoring service in place the credit freeze really isn't needed.

Most likely you will forget you even put the freeze in place and you will get denied any new credit till the freeze is lifted.  If you applied for new credit and the merchant has your contact information the new line will be on hold till you lift the freeze.

If the three day wait is imposed, a good way to look at the situation is that it's structure we all could use. Most credit situations are for things like new cars, new furniture or major appliances. That possible three day wait may result in slowing down, finding a better deal or just plain thinking about the cost before you jump.

When the needed credit is for an item that has been planned then a structured person will have thought of the need to lift the freeze on the credit before the search.

    To lift the freeze the consumer that has placed the freeze on their accounts will need to use the PIN that was issued at the time they initiated the freeze. So store that paper with that number somewhere safe and easy to find for later use.

    Another one of the drawbacks of the credit freeze is that each time you lift that freeze or remove it completely there may be a fee depending on your state. Usually it is the same cost as to establish the freeze. So a little planning may be in order.

When the situation arises that you find yourself in the need of applying for credit in an ongoing manner then releasing all of your accounts for a time may be the better option or you may want to wait till that period is finished before initiating the freeze.

To place a security freeze on all your accounts you must contact each of the three major credit bureaus separately and pay the fee for each. State laws (or lack of) rule here. There is a chart at each of the credit bureau websites with the information for placing a freeze and the fees for each of the states. Access to the transunion,

equifax, andexperian. chart at experian. You just select your state from a drop down box.

A security freeze will put the damper on new accounts from being opened but those whom you have an existing relationship will still be able to access your account along with others that have the right legally such as law enforcement officials.

There are states that still have not passed legislation to put the security freeze in action in their state yet. The three major credit bureaus have given those and all states the opportunity to do so.

Those that have passed legislation have made the cost the most minimal while those with no legislation cost more but is still quite reasonable.

What credit repair resources has found is that this is a good tool to deter fraudulent activity and seems to limit the endless offers of credit.

To learn if a credit freeze is right for you consider the material at consider the security freeze

credit freeze back to credit fraud
return to credit repair resources home page

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