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Dear Dr. Don,
What is a security freeze and how do you do it?
-- Karen Creditsafe
Dear Karen,
Here's how it's defined in Bankrate's
glossary:
"Also known as a credit freeze, a security freeze is essentially a lockdown on your
credit report and score. It blocks new lenders from accessing your credit file without your permission.
Since most credit issuers require a credit check before granting credit, the security freeze should block
most unauthorized attempts to obtain new credit in your name."
Security freezes don't apply to your existing account relationships, or for law enforcement
or other government agencies that may require a credit report as part of an investigation or to meet a
statutory responsibility.
The Bankrate feature "Freezing
out ID theft" provides a nice primer on the
process of instituting a security freeze. According
to the Consumers
Union Web site FinancialPrivacyNow.org:
"Forty-six states and the District
of Columbia have enacted laws requiring the credit
bureaus to enable consumers to protect their credit
files with a security freeze. Starting Nov. 1,
2007, the security freeze has been offered
voluntarily by Equifax, Experian and TransUnion
to consumers living in the states that have not
yet adopted security freeze laws (Alabama, Iowa,
Michigan, Missouri and Ohio). The freeze also
will be available to all consumers in the four
states with laws that limit this protection to
identity theft victims only (Arkansas, Kansas,
Mississippi and South Dakota). In order to effectively
freeze access to your credit files, you must request
the security freeze at each of the three major credit
bureaus."
The costs of freezing and unfreezing, your credit reports vary by state, age and whether you've
been a past victim of identity theft. The FinancialPrivacyNow.org
Web site
provides a convenient guide on the costs by state.
The cost of freezing and thawing your credit reports is a consideration, but the peace of mind
of knowing that only you can open your report for review by a new creditor can make it worth it.
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