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.
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.
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.
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.
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.
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.