Having your identity stolen is no stroll along the beach. Getting your name cleared takes a lot of time and effort. Victims of identity theft often suffer from the crime months and even years after it occurs. It can seem like you’re the one doing the time even though you weren’t the one who committed the crime. To prevent your identity from being stolen, or to prevent further identity theft after your identity has already been stolen, you consider freezing your credit report.
How a Security Freeze Works
Your credit report contains information about your payment patterns that creditors and lenders use to make credit decisions about you. When you freeze your credit report, creditors and lenders can’t check your credit report or credit score - the numeric value given to you credit report - unless you’ve provided the credit bureau a password to unlock your credit report. Since most banks require a credit check, an application for credit would likely be denied. You can freeze your credit report at all three major credit bureaus, but it must be done individually.
Creditors and lenders with whom you already have accounts can access your credit report and score without you first unlocking your credit report. Certain law enforcement agencies and other government entities can access your credit report and score despite a security freeze. The freeze doesn’t affect your credit score though it may make it harder for you to check your credit score through third-party websites.
You Might Freeze Your Credit Report If...
- You’ve been a victim of identity theft
- Your credit card number has been stolen
- Your mail has been tampered with or stolen
- You want to protect yourself from identity theft
- You’re subscribed to a credit monitoring service
State Law and Security Freezes
Most have laws requiring credit reporting agencies, aka credit bureaus, to allow security freezes on credit reports. However, 9 states (Alabama, Alaska, Georgia, Iowa, Michigan, Missouri, Ohio, and Virginia) don’t have such laws. For these states, all three credit bureaus, voluntarily allow consumers to freeze their credit reports.
In most states, the freeze remains in effect until you remove it. However, there are some states in which the freeze expires after seven years.
Fees range from $5 to $20 to freeze, temporarily lift the freeze, remove the freeze, or to replace your PIN. If you’ve been a victim of identity theft, there is no fee to freeze your credit report. Some states also waive the fees for seniors over a certain age. You must contact each credit bureau separately to freeze your credit report at that bureau.
Credit Freezes Aren't Foolproof
Freezing your credit report isn’t a full guarantee against identity theft. If the creditor or lender bypasses the credit check, an identity thief can still open accounts in your name. Also, be aware that not all types of identity theft involve opening new accounts with your identity. Some types of theft, like credit card shaving, involve existing credit cards and accounts. Finally, the security freeze works for the big three credit bureaus. There are other lesser known credit bureaus that lenders could using to approve a thief's application made using your personal information.