One Way to Protect Against Identity Theft

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:

Sample letter to Experian

Sample letter to Equifax

Sample letter to TransUnion

Wade Young is a Denver Mortgage Broker.