What to Think about Credit Freeze

What to Think about Credit Freeze

What to Think about Credit Freeze

Copyright (c) 2010 Suzy VanstrusenWith the goal to stop identity theft, the government is now encouraging consumers of the United States to take charge and put up a good fight. In November 2007, credit report freeze was introduced and all three major credit bureaus are ordered to provide credit freeze to people who want them.What is Credit Freeze?What exactly is credit freeze or credit report freeze and how does it protect you from identity theft? As the term suggests, freezing your credit means locking it from anyone who attempts to look into it. New creditors, insurers, employers, not even you, can access your own credit report while it is on a freeze.This means, when an identity theft gets hold of your personal information such as your social security number and tries to open a new account in your name, the lender will not be able to check on your credit report, making it impossible for the new account to be approved. When a potential creditor tries to inquire your report, a message will be sent that the report is frozen. Undoubtedly, that gives the consumer a huge protection from unauthorized transactions that could be made without your consent.Credit Report Freeze - Is it inconvenient?Nevertheless, some people feel that it has its inconveniences. Although a credit freeze does not expire, there are times when you have to "unfreeze" it. For instance, when you want to open an account or find a new job, you'll have to request that the "freeze be lifted" or "thawed". The unfreezing can take up just a few minutes but sometimes, it can take days or even a week for the bureau to unfreeze the report.Another thing is that it will cost $10 to $12 to "freeze" and "unfreeze" your credit report. Also, freezing your credit with just one credit bureau will not really give you the protection you want because lenders can still tap into your credit report through the other 2 credit bureaus. Thus, in order to work, a consumer must really request all three major credit bureaus to impose the credit freeze. This means, you'll have to pay $10 to $12 for each bureau.Requesting for a credit freeze also requires a person to send in a letter of request to the bureau with the necessary documents enclosed in it. Usually, 2 copies of a proof of residency or identity are required such as a driver's license or a billing statement. When the credit bureau receives the request, then the freezing process starts.Compared to a fraud alert, a credit freeze definitely provides a more reliable protection and is definitely worth the 10 bucks for each bureau. Still, a credit freeze does not mean you should be complacent about taking care of your precious personal information. Credit freeze is just one step. Although a freeze protects your credit report, it is still a must to stay alert in protecting your credit cards, licenses, IDs, bank statements, ATM receipts and other documents that contain your personal details on them.

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