If you’ve experienced identity theft in the past, or just want to take extra precautions to protect your credit, keep reading. All three credit reporting agencies have started offering a new service that will help you keep your credit in good standing.
According to Brian Koerner from About.com, the service involves a credit freeze (or security freeze) being placed on your credit file to “freeze” your file from being shared with anyone. As businesses inquire on your credit prior to opening any accounts, this may prevent new accounts from being opened in your name. If you no longer wish that your credit file be frozen, you can remove it permanently or you can temporarily lift the freeze for a particular creditor or time frame. Koerner warns that there is sometimes there is a fee associated with placing or removing a credit freeze.
Equifax will offer consumers the ability to freeze their credit file for a fee of $10 for each occurrence of having their file frozen or unfrozen. TransUnion and Experian offer similar services. Koerner says though not a foolproof method to protect against identity theft; this tactic does provide a great deal of value in preventing identity crooks from opening accounts in your name.
A credit freeze can make it extremely difficult for an identity crook to open a new account in your name. Koerner says new account fraud can be the most costly to an identity theft victim because these crooks will often open credit card accounts, auto loans and even mortgages in your name.
Koerner says a fraud alert and a credit freeze are two different things. A fraud alert is a flag on the report that a creditor receives when checking your credit rating that tells the creditor that there may be fraud involved in the account. While a fraud alert can help protect you against identity theft, it can also slow down your ability to get new credit, but should not stop you from using your credit cards or other existing accounts.
On the other hand, Koerner says a credit freeze is when your credit file is completely blocked from being seen by potential creditors, insurance companies, or employers doing background checks unless you give your consent. Most businesses will not open credit accounts without first checking a consumers credit history, he says.
If you choose to use the credit freeze service, creditors will need to contact you before they issue you credit, assuming they follow the process, Koerner says. This way, they can validate that it is really you seeking the credit, and not an identity crook.
Koerner says it’s easy to put a credit freeze in place. He says you can do it yourself or use one of the services available to do it for you. If you choose to do it yourself, Koerner says you will need to do the following:
* Send the correspondence to the credit reporting agency by certified mail.
* Include name, current and former address, Social Security number, and date of birth.
* Pay by check, money order, or credit card (Visa, Master Card, American Express or Discover only).
* Give name of credit card, account number, expiration date and date of birth.
* Pay by check, money order, or credit card (Visa, Master Card, American Express or Discover only).
* Give name of credit card, account number, and expiration date.
Major credit reporting agencies:
Equifax: 1-800-525-6285, http://www.equifax.com, P.O Box 740241, Atlanta, GA 30374-0241
Experian: 1-888-EXPERIAN (397-3742), http://www.experian.com, P.O Box 9532, Allen, TX 75013
TransUnion: 1-800-680-7289, http://www.transunion.com, Fraud Victim Assistance Division, P.O Box 6790, Fullerton, CA 92834-6790
