When Should a Credit File Freeze Be Used?

Identity Theft and Security: When Should a Credit File Freeze Be Used?

Identity theft is becoming more of a problem, with individuals, major companies and government agencies experiencing regular breaches. This creates a need for more vigilance from individuals to protect your data and identity.

Too often victims of identity theft do not find out about the breach until an application for credit is submitted or a bill collector calls regarding an account you never opened.

What Is a Security or Credit Freeze?

Putting a credit freeze in place restricts who can view and access your credit file and credit score. The restrictions last for seven years or until you instruct the credit bureaus otherwise. Temporary lifts can be accomplished enabling you to approve access to companies who need to view your file. This feature allows you to control who sees your credit and makes the reports available in the event you apply for credit, or do business with someone who needs to review your report and score. The process does not impact the score itself or the information found in your file.

A freeze is not a free service and each of the three credit bureaus must be contacted to put a security freeze in place. Fees are between $5 and $10 and are regulated by each state. You may temporarily lift it by choosing a certain time period or for a specific business. Another fee is charged each time you lift and reinstate the freeze.

Who Is Not Blocked

You can access your information without impacting your score.

Companies you currently do business with, including collection agencies acting on their behalf.

Government agencies have access to both your credit file and your credit score.

How Does a Security Freeze Work?

Once the security freeze is in place, a PIN number is assigned that can be used to temporarily lift and reinstate the freeze. It can take up to five days to process a lift request. If you lose the PIN number another one can be issued, for an additional fee.

Each individual must freeze their own account as it applies to a specific social security number, not a household or address.

Benefits of a Credit Freeze

Those who have been victims of fraud truly know the hassle and frustration to unwind purchases and new accounts opened in your name. If you have been a recent victim of fraud and have a police report, or other evidence of the fraud, you may be able to obtain a credit freeze free of charge.

Those who want more control over credit access. You must approve access to your file for applications, insurance, utilities and or job approvals, giving you greater control over who sees your file.

Limitations of a Security Freeze

While this action blocks access to the credit file, it does not block usage of current accounts. A thief who gains account numbers, or account information could make unauthorized charges on existing accounts. A thief however, would not be able to open new accounts in your name, be approved for a mortgage, or other forms of theft that involve pulling a credit file.

Fraud Alerts are a free option that restricts access to your credit report for 90 days. When a fraud alert is in place, your report can be pulled but the creditor must take additional actions to verify you are applying for the loan.

Identity theft has made vigilance of your personal data a necessity and part of life. A credit freeze is the most secure way to limit credit access but it also comes with the complications of accessing your own credit when needed.

If you are struggling with large amounts of high interest credit card debt, contact the specialists at Finance Solutions today (855) 331-4852 to receive a FREE debt analysis. They will review your current situation and develop a customized plan to help you reduce your credit card debt.