What is a credit freeze and how can it protect you against identity theft? Is it really an effective tool to fight ID theft and fraud?

What is Credit Freeze?

The purpose of credit freeze is to block everyone – new creditors, insurers, employers – from accessing a person’s credit report. Even the credit report owner is blocked out, unless he/she requests to “thaw” or “unfreeze” the report.

Identity thieves use stolen information to open new accounts. For example, an ID thief may try to apply for a new credit card under your name. Before the credit card company grants approval, your personal credit report will be reviewed. If it is on freeze, no lender will be able to access it, and therefore, no new accounts can be opened without your authorization.

If you want to apply for a loan or a credit card, the first thing you need to do is request the credit bureau to “unfreeze” your credit report before submitting your application. To “unfreeze” your report, you will be asked to provide the PIN code that you were given by the credit bureau when you requested for a credit freeze.

Freezing Your Credit
All the three major credit bureaus – Experian, Equifax, TransUnion – offer “credit freeze” to consumers. To request for credit freeze, you must send a letter of request, enclosed with 2 proofs of residency (driver’s license or a billing statement addressed to your name). Both “freezing” and “unfreezing” will cost you $10 to $12 from each credit bureau.
Safeguard Your Identity

Aside from putting your credit report on freeze, what else can you do to safeguard your identity against thieves and scammers? Here are some tips:

• Shred documents that contain any personal information before throwing them in the trash bin. (Ex. Atm receipts, banking statements, expired credit cards, old IDs, etc.)
• Ask your credit card issuer for an online credit card number that you can use when purchasing from online merchants.
• Check your accounts regularly.
• Avail of fraud protection service provided by your credit card issuer.
• To get in touch with a human customer service from any of the three credit bureaus, visit gethuman.com for a list of contact numbers.

About the Author
Melanie Mathis is a credit analyst and a writer for 8 years. She has been participating in the programs of NHBS, Inc such as their continuous effort in giving out Free Credit Repair and Building Ebook. NHBS also has a list of recommended Credit Cards for Bad Credit.
Copyright 2010