Regular readers of Scamicide are probably familiar with credit freezes, but it is important to remind everyone about the benefits of this tool that is simply the best thing you can do to protect yourself from identity theft.  A credit freeze is, as the name implies, is a freezing of your credit report at your request whereby no one can have access to your credit report even if they have your Social Security number and other personal information about you.  You control access to the credit report through a special PIN that you choose.   Thus, even if someone was able to steal your Social Security number, they could not parlay that into access to your credit report and use it to purchase things or set up accounts using your name.  If you need to thaw out your credit report at such times as you want to apply for credit in the future, it is an easy procedure to do by using your PIN; then, after your new credit has been established, you can freeze your credit report again.

Here is a link to the National Conference of State Legislature’s webpage that describes the credit freeze laws for each individual state.  Because the laws differ from state to state, you should check on the laws for your own particular state when putting on a credit freeze because the costs differ from state to state.

The credit reporting bureaus and many of the companies offering identity theft protection services advise people to put a fraud alert on their credit reports at each of the three major credit reporting agencies, Experian, Equifax and TransUnion, if you think you are in danger of identity theft rather than use a credit freeze. With a fraud alert in place, you are supposed to be notified if anyone attempts to open a new account or access credit in your name, which sounds like a good thing and it would be if it weren’t often ignored by businesses opening new accounts or granting credit in your name by identity thieves.

And what is the penalty, you might ask for a company failing to contact you before granting someone credit if you have a fraud alert on your credit report? Zero. Zilch. Nada. There is absolutely no penalty whatsoever if a company chooses to ignore a fraud alert and fails to notify you when someone attempts to open a new account using your name.  So why do credit reporting agencies recommend that people use fraud alerts to protect themselves from identity theft?  The answer is simple. The credit reporting agencies make billions of dollars by selling your information to banks and other companies. With a fraud alert in place, they can continue to sell your information however, if you have a credit freeze in place, they cannot sell your information. With a credit freeze in place, even an identity thief who already has your Social Security number will not be able to access your credit reports to use your credit to make purchases or open accounts in your name.

This is important because before opening new accounts, most companies will do a credit check of the applicant. With a credit freeze in place, a credit check cannot be done and consequently an identity thief will be prevented from opening new accounts

Having your credit frozen will not affect your ability to get your annual free credit reports from each of the three major credit-reporting agencies Equifax, Experian and TransUnion.  It is important to put a credit freeze on your credit report at each of the three major credit reporting agencies.  Here are the links to each of them where you can go to freeze your credit.