Lifestyle » Vol. 43

Freeze out identity theft

Appr1176252_88773633oximately 7 percent of U.S. households fall victim to identity theft each year, and those numbers are on the rise. But the news isn’t all bad. Consumers in every state have access to a powerful tool ~ the security freeze ~ to lock down their credit reports, preventing identity thieves from establishing new lines of credit in their names.

So, what are the pros and cons of freezing your credit?

First, a security freeze will not impact your credit score or impair your ability to use your existing credit cards. A freeze locks down your credit reports, which are used by lenders to determine your credit worthiness, not your actual credit.

With your credit reports on ice, opening new credit will require some minimal advanced planning. Opening store credit cards on impulse may no longer be an option. You’ll need to request a temporary “thaw” with all three credit bureaus to allow lenders to access your reports. The entire online thaw request process for all three bureaus should take about 20 minutes, and your reports can be set to automatically re-freeze on a date you select. Security freezes and thaws are generally free for identity theft victims. Non-victims in all but a handful of states must pay a fee to each credit bureau to implement a freeze (13 additional states waive fees for seniors). Fees vary by state, but are generally $3-$10.

For many consumers, a one-time fee to each bureau may provide a lifetime of protection. You’ll need to hold on to your login credentials with each bureau to thaw your reports. A lost PIN or user ID can be difficult and time consuming to retrieve. Secure your login information with each bureau as you would your birth certificate or other important documents.

Are there any alternatives to the security freeze?

A fraud alert is a less drastic but potentially a less effective protective measure. A fraud alert flags your credit reports, alerting potential lenders to verify the identity of anyone attempting to open an account in your name. Fraud alerts are free and don’t interfere with your ability to receive instant credit. However, fraud alerts rely entirely on the diligence of the person performing the credit check. Fraud alerts are also temporary and must be reinstated every 90 days in most cases.

It’s important to remember that while a security freeze offers powerful protection and a fraud alert may also be useful, neither is a cure-all. They will not prevent all forms of identity theft and will not protect you from misuse of existing accounts. Vigilance is key. Continue to regularly check your credit reports for unauthorized charges or other signs of fraud.

How can I implement a freeze?

To be effective, a freeze must be set up with all three credit bureaus.

Experian: experian.com/freeze/center.html
Transunion: freeze.transunion.com
Equifax: freeze.equifax.com

 

The mission of Better Business Bureau of Central New England is to promote and foster the highest ethical relationship between businesses and consumers through voluntary self-regulation, business and consumer education and service excellence. BBB business reviews and charity reports are available free at bbb.org. BBB of Central New England, Inc. was founded in 1940 and serves 225 communities in Worcester, Hampshire, Hampden, Franklin and Berkshire counties, as well as parts of Middlesex County and seven towns in Connecticut. BBB of Central New England is one of 113 local, independent BBBs across North America.

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