Eleven states including Alabama, Alaska, Arizona, Georgia, Idaho, Iowa, Michigan, Missouri, Oregon, South Carolina and Virginia still don’t have credit-freeze laws. A credit-freeze is no more than the ability for you to put a temporary freeze on your credit report, locking out the criminals, and putting you in charge. Businesses don’t like it, but you should. Here’s why…

Identity Theft is No Joke

If you’ve been a victim or know someone who has, it’s likely going to be the longest and most expensive nightmare you or they will ever experience. After years of building excellent credit it can all come down like a flimsy house of cards because someone, somewhere easily opened new accounts, bought cars, boats, clothes, jewelry, took expensive trips all in your name and all on your credit. When they don’t pay the bills you are the one that gets the creditor’s calls. Imagine how easily they’ll accept your explanation that it wasn’t you? Many victims have spent years trying to clear their names and yet the nightmare continues. The creditors have no incentive to believe you because that puts the loss squarely on them; they’d rather harass you into paying for debts you didn’t incur and there’s presently are no laws to stop them.

The credit bureaus offer credit monitoring services (for ongoing monthly fees). You may also be offered similar services by your credit card issuers and your bank (also for an ongoing monthly fee). Credit monitoring does nothing to protect against identity theft or fraud, it simply alerts you that possible fraud has occurred. That’s not good enough but now there is a better way.

More States Enacting Credit-Freeze Laws

In 2003 California took the lead in passing a credit-freeze law that gave residents and victims of identity theft the “option” to freeze their credit report. Since then 38 states have enacted (or are in the process of enacting) laws regarding credit-freeze (check effective dates on list at Consumers Union below) If your state is not listed you may have legislation working its way through the system and if not, find out why.

A credit-freeze allows you to freeze your account which effectively locks the door against a potential thief. Creditors check with one or more of the three major credit bureaus for your credit history before granting any new credit. If a freeze is in place they will deny the application (and you or the thief won’t get the credit). You can unfreeze an account online (takes less than 1 day) using the PIN provided when you signed up for the service or in writing (takes three to five days). You will likely need to remove the freeze from all three credit bureaus and they will all require a $10 fee to do so (fees may change or vary). Still a very inexpensive way to guard against identity theft and compared to the ridiculous monthly rates of a credit monitoring service, I’d say it’s a bargain.

How to Request a Credit Freeze

Check the requirements with each credit bureau separately. The main process is send a certified letter (which is hand delivered by the postal service–do not send regular mail) to each of the credit bureaus separately. Provide your full name, social security number, all addresses for past five years, date of birth, and either evidence that you were a victim of identity fraud or your check for the fee. They will return your PIN in about two weeks. If you’re married your spouse must request their accounts be frozen separately as well. For details and how to begin the freeze process visit:

  • Equifax Security Freeze PO Box 105788 Atlanta GA 30348
  • Experian Security Freeze PO Box 9554 Allen TX 75013
  • TransUnion Security Freeze PO Box 6790 Fullerton CA 92834

Why Credit Bureaus and Other Businesses Don’t Want You to Freeze Your Credit Accounts

Credit bureaus don’t like the credit freeze process because they cannot make money selling your information if it’s frozen, and they cannot sell you their overpriced credit monitoring service either. Maxine Sweet, Experian’s Vice President of Education says you may run into trouble if you forget your PIN but that’s true with all banking. She implies it takes a lot of time to access your account information as if they have to shuffle off to some dusty vault to retrieve your files which is ludicrous. I’m pretty sure they use computers now.

The downside to using the credit freeze is no different than managing any online account. If you forget your PIN you will be required to provide proof of identity via the mail, which is frankly the whole point. A credit freeze is supposed to protect you from fraudulent attempts. If it were easy it wouldn’t be much protection, would it?

Once they receive your request by the mail (assuming you provided what they require) they have a time limit set by each state in which they must comply with the request. Most of us can wait an extra week or two if need be before we obtain that new shiny toy, and if we’re buying cars or houses impulsively a bit of restraint may not be a bad thing. Plan ahead if you are moving, looking for a job or want to open a new account. You can always elect to discontinue the freeze permanently if you find it is too cumbersome.

More Information to Guard Against or Help If You’re Already a Victim of Identity Theft