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Credit Freeze and the Fight Against ID Theft

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Published: 21Apr2010
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Consumers are asking, what is a credit freeze and how does it protect my credit against identity theft? Is it really efficient? How is a credit freeze done and why should I be interested about it? In this article, we'll be answering these questions and provide more tips on fighting ID theft.

When a credit freeze is done, it blocks all new creditors, insurers, employers and the credit report owner himself from viewing or accessing his credit report. With a credit report on freeze, a credit inquiry is just not possible. How does this protect you from stolen identity? Identity thieves use stolen personal information in opening new accounts. For instance, a thief may try to open a new credit card account in your name and use that credit card in making incredibly large purchases for you to pay.

Opening a credit card account is fairly easy for identity thieves. When the credit card company looks in to your credit report and found that you are a good candidate for credit, the new credit card will be issued right away. However, when your credit report is frozen, the credit card company will not be able to check into your credit report and thus can't proceed in opening the new account.

But what if you really want to open a new loan or get a new credit card. You would first need to "unfreeze" your credit report before even submitting your application. This way, when your prospective creditor makes an inquiry about your credit history, your creditor will not be denied. In order to "unfreeze" your credit report, you'll need to get the PIN code provided by the bureau holding your report.

Freezing Your Credit

How do you avail of a credit freeze? Credit freeze is now offered by all the three major credit bureaus (Experian, Equifax, TransUnion). One can ask for a freeze by sending in his letter of request, enclosed with 2 proofs of residency. You may use a copy of your driver's license or a billing statement addressed to your name. Once a credit is put on a freeze, it will be permanent until the credit report owner requests for the freeze to be lifted. Both "freezing" and "unfreezing" your credit will cost you $10 to $12 for each bureau.

Safeguard Your Identity

Although a credit freeze can protect your report from unwanted inquiries or attempts to open fraudulent accounts, it cannot protect you from all types of schemes resulting from stolen identity. Thus, we should all be vigilant in protecting our personal information. Here are some tips:

* Shred all documents that contains any type of personal information before discarding them. (Ex. ATM receipts, banking statements, expired credit cards, old IDs, etc.)

* Keep all your important documents in a safe storage.

* Ask your credit card issuer for an online credit card number that you can use when shopping from the web.

* Check the status of bank account regularly.

* Avail of fraud protection service provided by your credit card.

* To get in touch with a human customer service from any of the three credit bureaus, visit gethuman.com for a list of contact numbers.

New Horizon Business Services, Inc NHBS, Inc has been providing consumers and business owners with financing since 1989. Join our mailing list for Free Tips on Rebuilding and Repairing Credit. Check your credit reports online.

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