How Credit
Freeze Can Help You Avoid Identity Theft
by Liz Roberts
Consumers are asking, what is a credit freeze and how does it
protect my credit against identity theft? Is it really efficient? How is a
credit freeze done and why should I be interested about it? In this article,
we'll be answering these questions and provide more tips on fighting ID theft.
When a credit freeze is done, it blocks all new creditors, insurers,
employers and the credit report owner himself from viewing or accessing his
credit report. With a credit report on freeze, a credit inquiry is just not
possible. How does this protect you from stolen identity? Identity thieves use
stolen personal information in opening new accounts. As an example, a thief can
try to open a new credit card account using your name and from there, he/she can
start making huge purchases for you to pay.
Identity thieves can easily open a credit card account. When the credit card
company looks in to your credit report and found that you are a good candidate
for credit, the new credit card will be issued right away. However, when your
credit report is frozen, the credit card company will not be able to check into
your credit report and thus can't proceed in opening the new account.
But what if you really want to open a new loan or get a new credit card. You
would first need to "unfreeze" your credit report before even submitting your
application. This way, when your prospective creditor makes an inquiry about
your credit history, your creditor will not be denied. In order to "unfreeze"
your credit report, you'll need to get the PIN code provided by the bureau
holding your report.
Freezing Your Credit
How do you avail of a credit freeze? Credit freeze is being offered by all
the three major credit bureaus (Experian, Equifax, TransUnion). One can ask for
a freeze by sending in his letter of request, enclosed with 2 proofs of
residency. You may use a copy of your driver's license or a billing statement
addressed to your name. Once a credit is put on a freeze, it will be permanent
until the credit report owner requests for the freeze to be lifted. If you want
to "freeze" and "unfreeze" your credit, you will have to pay each bureau a
certain amount ($10 to $12).
Safeguard Your Identity
Although a credit freeze can protect your report from unwanted inquiries or
attempts to open fraudulent accounts, it cannot protect you from all types of
schemes resulting from stolen identity. Thus, we should all be vigilant in
protecting our personal information. Here are some tips:
* Shred all documents that contains any type of personal information before
discarding them. (Ex. ATM receipts, banking statements, expired credit cards,
old IDs, etc.)
* Keep all your important documents in a safe storage.
* Ask your credit card issuer for an online credit card number that you can
use when shopping from the web.
* Check the status of bank account regularly.
* Avail of fraud protection service provided by your credit card.
* To get in touch with a human customer service from any of the three credit
bureaus, visit gethuman.com for a list of
contact numbers.
© 2010 Liz Roberts. Since 1989, New Horizon Business
Services, Inc NHBS, Inc has been providing consumers and business owners with
financing. Join our mailing list for
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