With the recent hacking of Equifax, personal information of over 143 million Americans were compromised. Identity thieves gaining access to an individual’s credit report allows them to open new accounts in the victims’ names. A credit freeze is a security method that restricts access to an individual’s credit report. New creditors would not be able to see your file and therefore would not be able to approve a new account and extend credit. Under a credit freeze, existing creditors and debt collectors would still be allowed access to your credit report. Government agencies may also have access to your frozen credit report with the use of a court or administrative order, a subpoena or a search warrant.
A credit freeze will not prevent an identity thief from making charges to your existing accounts. You should continue the process of monitoring all credit card, bank transactions and insurance statements to screen for fraudulent transactions. A credit freeze does not affect your credit score and will not prevent you from acquiring your free annual credit report. A credit freeze will also not stop you from opening a new account, applying for a job, buying insurance or renting a home but you will be required to lift the freeze temporarily for a specific time or to specific parties in order for these actions to be approved. A credit freeze will not stop an individual from getting pre-screened offers of credit. To opt out of pre-screened offers of credit for 5 years or permanently, you can call 888-5OPTOUT (888-567-8688) or access the following website, www.optoutprescreen.com.
You can place a free on your credit reports by contacting nationwide credit reporting companies such as Experian (1-888-397-3742) and TransUnion (1-888-909-8872). You will be required to provide your name, date of birth, Social Security Number, current address and other personal information. The fee associated with placing a credit freeze is between $5 to $10. Each credit reporting company will send you a confirmation letter for your freeze request containing a personal identification number (PIN) or password. You will need the PIN or password if you choose to lift the freeze at a later date.
A credit freeze will remain in place until you request the credit reporting company to temporarily lift or completely remove it. The cost of lifting a credit freeze varies by state. The freeze must be lifted no later than 3 business days after the credit company receives your request.
CREDIT FREEZE VS FRAUD ALERT: There is a major difference and trade off between protection and convenience.
We have compiled the most relevant differences to keep in mind when taking action
Credit Freeze
- Will lock down your credit.
- Can prevent someone from opening an account but will not prevent charges to existing accounts.
- Fees associated with request for credit freeze.
- Fees associate with temporary lift or permanent lift of credit freeze.
- Obtained by calling nationwide credit reporting companies such as Experian (1-888-397-3742) and TransUnion (1-888-909-8872).
- Allows creditors access to your credit report provided they take the necessary steps to verify your identity.
- Can prevent someone from opening an account but will not prevent charges to existing accounts.
- Initial Fraud Alert – protects an individual’s credit accounts from unverified access for at least 90 days. This alert is used for individuals have not yet been victims of identity theft but would like additional protection.
- Extended Fraud Alert – protects an individual’s credit accounts for 7 years. This alert is specifically for victims of identity theft.
- Active Military Fraud Alert – protects active military member’s credit accounts during deployment for 1 year.
- No fees associated with this service.
- Obtained by calling nationwide credit reporting companies such as Experian (1-888-397-3742) and TransUnion (1-888-909-8872). The nationwide credit report company must then tell your other credit reporting companies of your request and they will then place a fraud alert on their versions of your credit report.
As with any issue relating to credit and cyber security, being proactive and moving quickly is vital. Attorneys are investigating the matter and are always here to answer questions.