Money Talks, So Should You

Q&A: Should I freeze my credit to prevent identity theft?

Mechel Glass
by Mechel Glass, Dimespring Contributor  (@CredAbility)

Like many people, I’m concerned about protecting my financial information from online thieves who want to steal my identity. Identity theft is not a random occurrence; 12.6 million Americans were victimized by ID theft in 2012, the second-highest total since the Federal Trade Commission began counting victims in 2003. Slightly more than 1 in 20 consumers  5.26 percent  were victims last year.

Since I don’t plan to borrow money soon for a major purchase, such as a house or car, I don’t plan to apply for credit in the near future. So I’ve placed a freeze on my credit report, which will block any thief from opening new credit in my name.

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A credit freeze doesn’t mean that I can’t utilize my existing credit cards. Rather, it protects me from allowing new credit to be opened in my name without my permission. This means that if a thief obtains my Social Security number, they can’t use it to open a new credit card or any other credit. There are various ways that you can work with credit bureaus to protect your identity. Here’s a brief description of what they are and how they work:

Credit Freeze. A credit freeze can protect you from the vast majority of identity theft that involves opening a new line of credit. The freeze is permanent and once placed, potential creditors and other third parties will not be able to get access to your credit report unless you temporarily lift the freeze. This makes it unlikely that an identity thief would be able to open a new account in your name.

Placing a credit freeze does not affect your credit score  nor does it keep you from getting your free annual credit report, or from buying your credit report or score. In most states, there is no fee for identity theft victims to place a freeze. In other cases, there may be a fee to place the freeze, lift it temporarily, or remove it altogether. Keep in mind, placing a credit freeze requires that you contact each of the reporting bureaus individually.

Fraud Alerts. While a fraud alert won’t prevent an identity thief from using accounts you already have, they can help prevent them from opening any more accounts in your name. An initial fraud alert, which stays on your credit report for at least 90 days, is a good idea if you suspect you have been, or are about to be, a victim of identity theft.

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It’s a great step to take if your wallet has been stolen, or if you think you may have been scammed by a telephone or internet marketer and have given out personal information. When you place an initial fraud alert on your credit report, potential creditors must use what the law refers to as “reasonable policies and procedures” to verify your identity before issuing credit in your name.

If you are the victim of identity theft, you can place an extended fraud alert on your credit report for seven years. A formal complaint report must be submitted to place the alert and, once placed, creditors must contact you or meet with you in person before they issue you credit.

Fraud alerts can be removed from your credit report at your request. Keep in mind that while a fraud alert can protect you from further damage from identity thieves, there may also be delays in your legitimate attempts to obtain credit. Keep information current, and consider including a cell phone number for quick access.

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To place a fraud alert, contact the toll-free fraud number of any of the three consumer reporting companies to place an initial fraud alert on your credit report (TransUnion 800-680-7289; Equifax 800-525-6285 and Experian 888-397-3742). You only need to contact one of the three companies to place an alert. The company you call is required to contact the other two, which will place an alert on their versions of your report, too. If you do not receive a confirmation from a company, you should contact that company directly to place a fraud alert.

Remember, taking steps to protect your identity is your responsibility. Guarding your personal information, monitoring what’s in your credit report, and taking swift action in the event of suspicious activity all go a long way in protecting your good name.

Mechel Glass is vice president of community outreach for CredAbility. She is responsible for coordinating community outreach and financial education activities across the agency’s regions and developing new education programs for both classroom settings and online. Glass, a U.S. Army veteran, is also co-author of “The Veteran’s Money Book,” scheduled for publication in April 2014 by Career Press. The book can now be ordered on