When information gets stolen, it is used in various ways. Sometimes the thief may use it to drain your bank account, for example. According to the Federal Trade Commission, 20% of the time stolen information is used to open new accounts.
Fortunately, there is a way to help prevent new accounts from being opened in your name. It’s called a “Security Freeze,” and it is relatively easy to put in place.
Most creditors will not extend credit without first pulling a consumer’s credit profile. If you place a “security freeze” on your credit profile, the reporting agencies are prohibited from releasing your credit information without your express, written consent. The freeze is designed to prevent loans, credit and services from being approved in your name.
Depending upon where you live, there may be a small fee to place the freeze and/or lift the freeze. After your freeze request is submitted, the credit agencies will respond within 10 business days with a confirmation letter. That letter will contain a pin number or password that you will need in order to lift the freeze. The reporting agencies must lift the freeze within 3 business days of receiving your request. Once in place, the freeze will remain on your profile until you specifically request to have it lifted. Placing a security freeze will not impact your credit score.
The downside of placing a security freeze on your profile is that it can be a bit of a hassle when you go to buy a car, apply for a cell phone, or begin utility service. You will have to think ahead before you take out new credit to ensure that the freeze has been lifted. To lift the freeze, you will need to provide proper identification, the pin or password provided to you when you placed the freeze, the requisite fee, and information regarding the specific party who is to receive the report OR the time period for which the freeze is to be lifted. I don’t mind the hassle, though. I’m glad to know that a con man isn’t out obtaining a loan in my name. Placing a security freeze on your credit profile does not offer complete protection against identity theft. It won’t protect against someone gaining access to your pay pal account, for example. However, it does offer a level of protection against new loans being extended in your name.
To place a security freeze, you must send a certified letter to each of the three major credit bureaus. Below are sample letters to each of the three credit bureaus:
Wade Young is a Denver Mortgage Broker.
The ‘freeze’ is especially helpful when protecting children and the elderly — they are often targeted by identity thieves (and by other family members).
But, what about Medical ID theft and alike
It’s not just ONE way to protect against credit based ID theft, it’s the BEST way. Since most ID theft is credit based, you will rest a lot easier if you do this.
As for Medical ID theft and such, you can take comfort that it’s far more rare, but no, credit freezes won’t do anything for that.
I have personally been an ID Theft Victim, and Lord knows that had I not been in the business of dealing with credit on a daily basis it could have gotten really ugly. This post is gold. Most people aren’t that intimate with credit in general and could really benefit from your advice, Wade. I now have a police report that has allowed me a 7 year alert on my credit!
Chris
@Chris the Implementer: Alerts are NOT freezes. If you don’t have a PIN or Password provided by the credit report companies, you don’t have a freeze. If you have an expiration date on the protection, you probably don’t have a freeze. If you don’t have a freeze, you don’t have anything. Fraud alerts are WORTHLESS:
http://www.jeremyduffy.com/seminar/id-theft-module/
Jeremy
Yeah, I knew they weren’t the same thing and apologize if I was unclear in the last post in that I had thought they were. I have not had any issues in the last several years, so [maybe foolishly] felt that the 7 year ‘alert’ was sufficient. So your take is I am still vulnerable?
C the I
Yup! Consider that a fraud alert is just a flag on the application screen that the person running your credit is supposed to take as direction to be more cautious when granting credit. I can tell you from experience that low-paid CSRs who run credit apps aren’t going to lift a finger to make extra effort as long as the ID looks ok (and sometimes not even then). The key is that a fraud alert depends on the credit grantor, who has much to gain by granting credit and very little to gain by refusing) to be proactive. A freeze makes it effectively impossible for someone to get credit in your name because no credit grantor (Best Buy, Macy’s, Bank of America, etc) will be able to access your credit report until you specifically thaw your credit for THEM by NAME. After they access it once, the credit file is locked to them (unless they grant credit and then they have an existing relationship with you and can access it regularly).
good info, thanks Jeremy. I gues the pivitol question on the freeze becomes how easily can you unfreeze it in the case of legit inquiries, etc…
C the I
C the I,
You can temporarily lift the freeze if you will be applying for credit. This can be done over the phone, online, or in writing with each of the 3 bureaus. Depending on your state, there may be a nominal fee involved. Usually $0 – $10 (I think it may be $12 in Iowa for Transunion if you weren’t a victim of identity theft). You will need to specify the number of days you want the freeze lifted — and I believe one if not all the bureaus will cap the lift at 30-days.
If you don’t find yourself applying for credit often, it’s only a moderate inconvenience in exchange for solid protection.
-Chris
@Chris Rocks
It sounds like an beneficial trade off. I am going to investigate it deeper. Especially at the rate my online footprint is increasing… this is going to become a bigger and bigger need!
Chris the Implementer
It was the ‘online footprint’ comment that has me thinking. Mine has exploded in the last 2 years, and my children were signng up for everything , giving out post code and phone numbers. I had a call congratulating H**** my son ; he had won… a chance of being entered for a draw for an Xbox game, if he changed his electricity provider. He’s 10. Big Big clamp down on computer use.
So did he change his provider? Those Xboxs aren’t cheap you know! LOL. What you point out is what I would like to ‘manage’. I know the more and more you are out there the seepage into your life is going to increase… likely unavoidable. Protecting yourself from malice… that is the key. [Limiting the excrement is a plus, too.]
C the I
I really only recommend a security freeze if you have already been a victim of identity theft and want to make sure there are no further incidents. Like you said, having a freeze can be a huge pain — any time you need new credit (or need to readjust credit) you have to lift and replace the freeze, and in many states, if you’re not an identity theft victim, that costs extra money each time. I think a better alternative for people who just want protection but haven’t been identity theft victims yet is credit monitoring, which notifies you when new credit has been obtained in your name, but doesn’t go as far as freezing all your credit. It’s not 100% guaranteed nothing will slip through the cracks, but is less of a hassle. However, if you have been an identity theft victim, I completely do recommend the credit/security freeze.
My personal case has not had any activity for almost two years now, so it is not something I am overly concerned about [with the same instance.] The concern may be for future unrelated occurances with having a larger internet presence.
@Emily, I’ll assume to be polite that you are being serious and not facetious, but are you kidding me? Monitoring? What a waste of money. Note that all monitoring does is alert you that something’s happening. It does nothing to actually prevent theft like freezes do. Besides, it’s not that expensive or difficult to thaw your credit and how often do you access it anyway? If you do it a lot, maybe you have a point, but most people don’t. Think of all those retired people who can barely make it to the store and back without help and they’re supposed to manage their credit file protection? I don’t think so. Better to lock it and forget about it.
ahhh….. my head is spinning…. getting dizzy.. can’t keep balance… THUD!