Things You Need to Know About Credit Report Freeze

Copyright (c) 2010 Suzy Vanstrusen

Most of us are aware of what a credit freeze. However, there are still important points that we must know before finally deciding if this is applicable to your current situation. Below are frequently asked questions about credit report freeze and also the answers.

What is a credit report freeze?

Credit freeze is also know as a credit report lock down, a credit lock, or credit report freeze. As these terms suggest, placing your credit report on "freeze" prevents the credit bureaus from releasing your report without your consent. Actually, the owner of the "freeze" credit report cannot also access his/her credit report unless he'/she requests to have it "unfreeze".

Why is a credit freeze more advantageous than a fraud alert?

When a fraud alert is place in a credit file, anyone who makes an inquiry will see the alert. For a creditor, it is a warning that someone else may be trying to open the account using the credit report owner's identity. Thus, before approving the application, the creditor may notify the credit report owner to confirm whether he/she actually sent the application. Nevertheless, a creditor may also ignore the alert and simply go ahead with the approval. With a credit freeze, creditors will not be able to make an inquiry at all so if someone is trying to use your identity to open a new account, the creditor will immediately reject the application.

How do you request for a credit freeze?

To request for a credit report freeze, a consumer must send a letter to each of the three major credit bureaus (Experian, Equifax, and TransUnion) along with 2 copies of identification and a fee of $10 to $12 for each bureau. The cost varies from state to state but should not go beyond $12.

How can you lift a credit freeze?

If you plan to apply for a new credit card or acquire a loan, you will need to undo the "freeze" by contacting the credit bureaus. To lift the freeze, you must be able to provide proof of identification, the password or PIN that was provided to you by the bureau, and a statement that you authorize the credit bureau to release your credit report to the specific company and the period for which your report will be made available. The process of Unfreezing can take from just a few minutes to a few days depending on the credit bureau holding your report.

Should you get a credit freeze?

Some people may feel that the process of credit freezing is too complicated and inconvenient. However, if you want to safeguard your credit file from fraud, a credit report freeze is recommended.

What are the limitations of a credit freeze?

It's important to understand that a credit freeze will not apply to your existing accounts. Therefore, your present creditors can still gain access to your file. A credit report freeze only locks out new inquiries. The most important thing to remember is that even if your report is on "freeze", you must not stop being vigilant about protecting yourself from identity theft and fraud.