Money

Worried About Identity Fraud? Consider a Credit Freeze

One of the biggest concerns that many people have right now is identity fraud. There is good reason for concerns about identity theft: It’s the fastest growing crime. Whether someone uses your name and address to open a line of credit, or whether you credit card number is hijacked, identity theft is a very real concern. One way to protect your identity it to get a credit freeze. It won’t stop someone from using your credit card number, but it can help you avoid having an account opened fraudulently in your name.

What is a Credit Freeze?

A credit freeze is an indication that no new credit is to be opened in your name — unless certain verification steps are taken. You will have to get a credit freeze at each of the three major credit bureaus in order for it to take full effect. When your credit freeze is activated, a credit check run by a lender will result in a notification that no new credit can be opened in your name. You may have to pay for a credit freeze, depending on the credit bureau, and your state of residence. However, if you have checked your credit report and found that you are already a victim of identity theft, you can usually get a credit freeze on all three reports for free.

Once your credit is frozen, it’s difficult to get credit. So, if you place a freeze on your credit report, you will need to be prepared for the increased difficulty in accessing your own credit. You might required to use a certain PIN or password when you apply for credit so that the credit bureaus know that you are truly applying for credit. It can also help to think ahead, and contact the credit bureaus to let them know what you are doing. You can even arrange to have the credit freeze lifted. If you don’t want to run into these problems while applying for credit, you can take care of matters ahead of time. Once you are done, you can reinstate the credit freeze.

Bottom Line

If you are worried that someone might try to open credit in your name, a credit freeze can be a deterrent. You’ll be able to keep tabs on your credit report, still, and you can keep others from using your good name to borrow money. Just remember that a credit freeze will block you from opening new accounts with ease.

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