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Special section Guarding against ID theft: myths and real stories

The credit freeze blocks most third parties from accessing your credit file. Here's how it works.

14 myths about credit freezes

By now, you might have heard about credit freezes. A credit freeze prevents credit bureaus from releasing your credit report or score to new lenders, insurers and other new service providers.

The credit freeze often gets confused with the fraud alert, which tells new creditors that the consumer may have been a victim of fraud and asks creditors to take additional verification steps before issuing credit.

A credit freeze won't remove you from prescreened offers for credit and insurance lists, for instance. The fraud alert does that. They also aren't available to all consumers. As of this writing, states determine whether their residents may freeze their credit files and in which circumstances. Anyone can raise a fraud alert.

To set the credit record straight, we spoke with the credit industry about some of the biggest assumptions and added a few other questions we thought were important to clear up. Clearing the fog of confusion that hangs over credit freezes, here are the answers to some of the mistaken beliefs fluttering around.

May you be a little wiser about protecting your credit file from identity thieves.

14 myths about credit freeze:
1. Anyone can freeze his or her credit files.
2.Credit reports cannot get updated during a credit freeze.
3.Apartment providers can still run a credit check during a file freeze.
4.Current creditors cannot run credit checks on your report if the file is frozen.
5. Credit freezes stop prescreened offers for credit and insurance.
6.New creditors who request a credit report under a credit freeze will still receive your credit report, with a warning about possible fraud.
7.You can't check your own credit report or score under a credit freeze.
8.Once set with one credit bureau, the agency will automatically notify the other two of the credit freeze.
9.You can thaw a credit freeze within minutes.
10.You can't use your credit cards during a credit freeze.
11.Credit-monitoring services won't work during a file freeze.
12. If you give a company written consent to access your file, it can sidestep the freeze.
13.Credit freezes prevent identity theft.
14.Once removed, creditors will see evidence of an old file freeze.

1. Anyone can freeze his or her credit files.
No, anyone can initiate a fraud alert, but only residents in certain states have the right to freeze their credit. Some state laws restrict credit-freeze rights to identity theft victims. So far, no federal law bestows credit-freeze rights on all consumers. Residents of states with no credit-freeze laws in effect can only use fraud alerts if they are concerned about identity theft.

2. Credit reports cannot get updated during a credit freeze.
Think about it -- that just doesn't make sense. "An un-updated report wouldn't be useful to anybody," says Norm Magnuson, vice president of public affairs for the Consumer Data Industry Association. That would mean your report could potentially be frozen in time for years, he says. People with file freezes still have to pay their bills on time.

3. Apartment providers can still run a credit check during a file freeze.
An apartment application is treated like a new credit account, says Maxine Sweet, vice president of public affairs for Experian. New creditors cannot access your credit file during a credit freeze. Then again, a credit check may not affect your ability to rent an apartment. It depends on your landlord's criteria for apartment rental approvals, says David Rubinger, Equifax's vice president of communications. Check with the company first to see if it requires a credit check before granting new apartment rentals.

If a credit check denial will cost you the apartment, unfreeze your credit file in advance of applying -- it can take up to three days for the freeze to thaw. Ask the apartment staff which credit-reporting agency they use for credit checks and unfreeze the credit file kept by that bureau.

Next: "... if you want instant credit, you'll have to thaw ahead of time."
Page | 1 | 2 | 3 |
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