Credit Security and Scams

If you have become a victim of identity theft, it can take a lot of time and effort to get your name cleared. The average person spends about 600 hours clearing his or her identity! You can greatly reduce the risk by acting quickly when your personal information has been stolen. Consider freezing your credit report. It is a good way to minimize the financial consequences of identity theft. The freeze locks down your credit report, so no one - including you - can open new accounts in your name.

A credit report is a gold mine of information about your credit activities. It contains data about the loans you have had, their types, current balances, and your payment pattern over the previous two years. Lenders use this information to decide whether to approve your application or not. When you freeze your credit report, they can't access it unless you provide a PIN. Since most banks require a credit check, your application would likely be denied. If you're shopping for a balance transfer or rewards credit card, loan, apartment or job, you can temporarily lift the freeze.

Consider credit report freeze if:

• You have become a victim of identity theft
• Your SSN or credit card number has been stolen
• Your mail has been hacked
• You want to protect yourself from an identity theft

To request a credit freeze, contact each of the three bureaus separately because there is no way to freeze all three credit reports at once. Make your request in writing. The letter should include your name, current address, proof of address (for example a copy of your utility bill), social security number, date of birth, copy of valid identifying documents and payment. Credit bureaus don't return your correspondence, so send copies, not originals of all important documents! Send your request via certified mail.

You can make the payment with a check or a credit card. Its amount varies by state, but typically this service costs from $5 to $20. Victims of identity theft can often get a freeze for free. Just provide proof of the theft, for example a copy of report from either the police or another law enforcement agency. Some states don't charge the fees for seniors over a certain age.

After the credit bureau receives your letter, it will send you confirmation that your credit report has been frozen. You will also receive a PIN for temporarily unfreezing your report or permanently removing the freeze. Keep in mind that current credit companies and government entities can access your credit report without your PIN.

In most states, your report will be frozen until you decide to unlock it. However, there are some states in which the freeze is over after 7 years.

Credit report freeze isn't a 100% guarantee against identity theft. If a lender doesn't check your credit report, an identity thief can still apply for new credit cards in your name. Some types of theft, for example skimming, involve existing plastics and accounts. However, credit freeze lets significantly reduce the risk of possible fraudulent actions and save you time and money on credit repair.