Freezing your credit report can prevent identity theft.
Identity theft is a major concern these days and advances in technology continue to help criminals improve their skills and techniques. However, beyond your standard suggestions for identity theft, you can go one step further and consider a credit freeze.
When a person wants absolute security that criminals will not be able to access their credit accounts, they can request that their credit reports be frozen. When there is a credit report freeze, no one can open a credit card account or obtain a loan or mortgage in the name of the account holder, not even the account holder.
The freeze can be lifted or “defrosted” by using the Personal Identification Number (“PIN”) or the password given by the credit bureaus when you initially request the freeze.
However, a credit report freeze generally does not apply to existing account relationships, since these creditors, lenders, etc., will still have access to reports to comply with basic activities such as account reviews and fraud control. .
All states with the exception of Alabama, Michigan and Missouri have adopted mandatory security freeze laws. The states of Arkansas, Kansas, Mississippi and South Dakota limit this protection only to victims of identity theft.
However, finances company now extend credit freezes to all who request it, even if they reside in states that have not yet approved this process in whole or in part. These three main credit bureaus request the same information in the variation:
- Letter sent by registered mail with the name, address, date of birth and SSN of the applicant.
- copy of the utility bill.
- copy of the driver’s license.
- police report if the person is a victim of identity theft
- Past addresses dating back two years.
- payment for processing fee.
A freeze must be requested in all three offices to be effective and a person must confirm exactly what is needed with each agency.
The freezing of credit reports is free for victims of identity theft, but for those who request it as a preventive measure, the rate generally ranges between $ 5 and $ 10 in each office and for most states.
In addition to the three main credit bureaus, consumers should also verify the laws in their own states regarding this process, as the requirements and rates will vary.
Fraud alert against credit freeze.
There are similarities and differences between credit freezes and fraud alerts. Nor does it prevent a person from accessing the credit they already have. With fraud alerts, electronic red flags are placed on credit reports in the three credit bureaus.
In an effort to prevent fraudulent actions from being carried out, it is assumed that the verification of the identity of a person requesting a credit with a name that has this red flag should be verified more thoroughly.
On the other hand, when a credit application is submitted under a frozen account, the only information that will be displayed is a code that states that all reports with this name are frozen and that there is no more access to the account.
For the legitimate consumer, the disadvantage of freezing a credit report is that it could delay, interfere with or prohibit the timely approval of any financial request or request that occurs after the freeze has been established.
If a consumer wants to temporarily lift the freeze to complete a specific application process (that is, apply for a loan), they can do so, but they will have to pay to defrost their files and pay again to put the freezer back in place.
To activate the defrosting, temporary or permanent, the consumer must present the following information to the credit bureaus:
- information that verifies identity.
- PIN or password given
- A letter requesting the elimination of the freeze, and if it is temporary, the name of the person or company to have access to the credit files or for how long the files must remain available.
Putting fraud alerts in place is free and is a simple procedure to call the three credit bureaus. Putting a credit freeze in place is a more complicated process and, therefore, should involve thinking, consideration and planning before deciding to execute the process.
Of course, if you are not looking for a loan in the market and you will not need to borrow money for a while, freezing is a sure way to prevent another person from using your credit.