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Identity stolen? Freeze your credit report

Since 2003 all California residents have had the right to freeze their credit reports, prohibiting credit from being issued in their names. (See this chart for an updated list of states that allow credit freezes.) This was a first in the United States. Now, more states offer their residents the same rights: New Jersey, Louisiana, Texas, Vermont, Washington, Nevada, Connecticut, Illinois, Maine, North Carolina and Colorado. However, Texas, Vermont, Illinois and Washington limit this opportunity to those who have been the victim of identity theft or a security breach.

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Anyone can ask the three major credit reporting agencies to place a fraud alert on their credit reports. Fraud alerts are supposed to alert you when someone applies for credit in your name and signals creditors to contact you for permission to issue credit in your name. Residents of any state can put a fraud alert on their reports. Creditors, however, aren't required to abide by or even check the alert.

A credit freeze goes a step further. With a credit freeze, no one can open any form of credit in your name. Your credit file is off limits to potential lenders, insurers and even potential employers. Here's how it works.

When you apply for a loan, credit card or cell phone, the company issuing credit contacts one of the three credit reporting agencies and requests to see your credit file. If you have a freeze on your account, the company will be told that it cannot see your credit file because your account is frozen. At this point, most companies would not allow the loan, issue the credit card or activate the cell phone.

But this does not mean that you won't be able to get credit for yourself or allow potential employers to run a background check. The three credit bureaus assign a personal identification number for you when you freeze your report. Using this PIN, you can lift the freeze when necessary.

With a credit lock-down, a criminal can have your name, birthday and Social Security number -- but it won't matter. No credit will be issued.

How it's done
To lock down a credit report, consumers must contact each of the three credit reporting agencies. For the majority of states, there is no cost if you are a victim of identity theft, as long as you have a report from either the police or law enforcement agency. California residents who are not identity theft victims must pay $10 to freeze each credit report, or a total of $30 to freeze their files at the three credit bureaus.


-- Posted July 20, 2005




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