What is a Security Credit Freeze and When Should I Use One?

What a Credit Freeze Is A credit security freeze stops anyone from obtaining access to your credit report without your approval (see the exceptions listed below). You are provided with a personal identification number or password to use for authorizing temporary release of your credit report for a specific requestor or period of time. The pin or password will also have to be used to remove the freeze.

There are state laws that vary about what can be released during a freeze. A security freeze generally does not apply to companies that you already have an account with. Your existing creditors can still review your account for collection, review, or fraud control. Prescreeners are also allowed access, even though you will probably have to release the freeze to actually get the credit.

When To Use a Credit Freeze

The best time to use a credit freeze is when your purse or wallet is stolen, or you think someone is trying to steal your identity. In this case, you would also want to put a security alert on your credit report before you freeze it. You should also file a police report.

If your identity has been stolen, or you have fraudulent activity on your credit report, you can place a victim statement on your report for seven years. To do this, you will also need proof identifying yourself and where you live. You will need a telephone bill in your name clearly displaying one of the two phone numbers that will appear in the victim statement. Be sure to contact the creditor reporting the fraudulent data. You should also alert your current creditors and ask what precautions are available for your use.

If you believe that someone is using a deceased relative’s credit fraudulently, the executor of the estate or the spouse needs to notify the credit reporting agencies.

When reviewing your credit report for fraudulent activity, look for new accounts you did not open, inquiries against your report, and check the addresses for any that you have not lived at.

You do not want to use a security freeze if you are applying for any of the following unless you want to authorize each transaction, or release the freeze for a specified period.

• new loan or credit
• mortgage
• insurance
• government services
• rental housing
• employment
• investment
• license
• utilities
• some internet transactions
• extension of credit at point of sale

To authorize a release you will have to provide sufficient identification verifying your identity, your pin or password, a statement that you are either removing the security freeze, authorizing a person to temporarily access it, or the time period it is to be released. You must name the person you are authorizing, or the period for which it is to be released. It can take several days for the credit reporting agency to activate the release.

How to Place a Security Freeze

To place a security freeze you have to go to each of the credit reporting sites.

• Equifax or call 1-800-685-1111 (for some states)
• Experian or call 1-888-EXPERIAN (1-888-397-3742)
• Transunion or call 1-888-909-8872

There is a fee of $3 to $20 for adding the security freeze (depending on the state you live in), and when temporary access is requested, and for removal. The fee is waived if you are a victim of identity theft and submit a valid police report. In Florida, Georgia, Illinois, Oklahoma, and Pennsylvania the fee to add the freeze is waived if you are 65 years of age or older, but not the fee to lift it. Louisiana is free for age 62 or older. Nevada, Rhode Island, and Washington is free for age 65 or older. In New Jersey it is free for anyone to add, but has a fee for release. If you need temporary access, you will have to provide the identity theft report again for the fee waiver.

Alternatives to freezes are offered by Equifax. They have an online subscription service that allows you the ability to easily lock and unlock access to your Equifax credit report, even for specific companies.

Transunion states that all temporary lifts to security freezes have a minimum time period of one day to a maximum time period of thirty days.

In Summary

A security freeze on your credit is a good way to protect your credit if your credit or identity has been compromised, or if others will not be needing access to your credit.

See also: If You Believe You are a Victim of Fraud.