It all started in 2003. A credit freeze law was first introduced in
California but it was not until the year 2007 when the three (3) major
credit bureaus- Equifax, Experian and TransUnion- announced that they
would allow people to freeze their credit report. Let us first discuss
what a credit freeze is and why it is being used by more and more
people.
Credit Report Freeze - What it Means
A credit freeze, which is also called credit report freeze or a credit
report lock down, gives an individual the control over his/her credit
report. It is done to prevent other people from accessing your credit
report unless you give them permission to do so. Lenders, insurers,
potential employers, landlords, marketing companies etc. will not be
allowed to tap into your credit report while it is on freeze. You can't
even access it yourself.
You can gain access to your credit report again if you are going to make
a request for a "thaw" or "unfreeze" from the credit bureau. Credit
freeze is often viewed by people as a way to prevent other people
especially scammers from accessing data from your credit report.
The Difference Between Credit Freeze and Fraud Alert
If someone is trying to open an account using your name, the creditor is
then alerted to contact you (as the credit report owner). That is a
fraud alert. It is not that reliable because a creditor can either
choose to contact you or ignore this alert and continue with opening the
account without letting you know. While if it a credit freeze, your
report is totally not accessible no matter who is trying to access it,
not even you. A creditor who wishes to get data regarding your credit
report would just receive a message stating that the report has been
frozen.
If you are planning on opening a new account, then you have to request
for the freeze to be lifted. A credit freeze gives more protection when
it comes to fraudulent acts or identity theft.
How do you freeze your credit report? With regards to fraud alert, it is
simpler because you can just call the credit bureau and request for an
alert. On the other hand, freezinga credit report requires more work.
Here is how it is done: first
Freezing and Unfreezing Your Credit Report
Freezing your credit report. First, you should send a letter of request
to the credit bureau. Together with this request are all the
requirements for freezing. For instance, you would need to submit at
least 2 copies of your proof of identification with your letter. There
is also a freezing fee of $10 to $12 (the freezing fee varies depending
on the state of residency) every time you make a request for a credit
freeze. In some states, victims of identity theft are allowed to waive
the freezing fee. They are just required to submit proper documentation
such as police report or identity theft report to support their claim.
Unfreezing your credit report. This process can be done in minutes or up
to 3 days or even a week with a fee of another $10 to $12 depending on
the credit bureau holding your credit report. Again, you have to send a
request to have it done.
There is also an option of unfreezing your credit report for a limited
period of time. This is usually done when the credit report owner is
applying for credit. He/She can request the credit bureau to just allow a
few people to access your report. You just have to specify the names of
these people.
Some people think that freezing their credit report can be very
time-consuming considering the fact that you need to unfreeze it every
time you want to access it, but if you would consider the importance of
it, which is giving you protection from identity theft, then it's well
all worth it.
