Credit freeze cost sometimes a bargain

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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

“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 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.