How To Use A Credit Freeze

A credit freeze is a valuable tool made available to all consumers who want to restrict access to their credit report. This action is particularly useful in stopping identity thieves from doing more harm. Since lenders require a credit report review before approving new credit, a credit freeze blocks identity thieves from opening new credit cards and loans in your name. But a credit freeze also prevents you from applying for new credit unless you temporarily lift it. Knowing the ins and outs of a credit freeze beforehand helps you better manage and protect your credit and ensures that the credit freeze is working to your advantage.

The Workings Of A Credit Freeze

The three consumer credit reporting agencies – Equifax, TransUnion and Experian – each have their own credit file on consumers. A credit freeze blocks the information in these credit reports from being viewed by any third party. A credit freeze can be placed, temporary lifted and removed from your credit report. Only the person whose name is on the credit report can place, lift, or remove a credit freeze. The fee to place, lift, or remove a credit freeze varies by state, with the cost ranging from $3 to $20 per transaction, per each credit reporting agency. In a few states, no fee is charged. Some states will waive the fees if you prove that you are a victim of identity theft.

Using A Credit Freeze

If you decide to place a credit freeze on your credit report, only you, the companies you do business with and those allowed by law can access your credit report. A credit freeze has no affect on your credit score and you can still request an annual credit report. However third parties, such as financial institutions or credit card companies interested in extending you credit, cannot access your credit report. The three credit reporting agencies differ in the manner in which you can place, lift, or remove a credit freeze. Some require the request in writing, while others will accept your request over the phone. Most require the following information for placing a credit freeze: your complete name and address, date of birth and Social Security number.

Temporarily Lifting A Credit Freeze

If you plan to apply for a loan, open a new credit account, or apply for anything that requires viewing your credit report, you can request that the credit freeze be temporarily lifted. You can indicate a specific period of time or designate which companies can view your credit report. You also need to provide the following information: your complete name and address, date of birth, Social Security number and the personal identification number (PIN) assigned to you by the credit reporting agency. It may take up to three business days for your request to be processed and the credit freeze lifted.

Permanently Removing A Credit Freeze

A credit freeze remains on your credit report until you remove it. If you choose to permanently remove a credit freeze, the following information is required: your complete name and address, date of birth, Social Security number, the PIN assigned to you by the credit reporting agency, and copies of two forms of identification, such as a pay stub with your address or a utility bill.

Related Topics: Identity Theft Resource