Credit Freeze How does it work?
When you do a credit freeze on your credit report, creditors and lenders can’t check your credit report or credit score - the numeric value given to you credit report - unless you’ve provided the credit bureau a password.
Since most banks require a credit check, an application for credit would likely be denied. You can freeze your credit report at all three major credit bureaus.
Current creditors can access your credit report and score without your password. Certain law enforcement agencies and other government entities can access your credit report and score. The freeze doesn’t affect your credit score.
You Might Freeze Your Credit Report If...
• You’ve been a victim of identity theft
• Your credit card number has been stolen
• Your mail has been tampered with or stolen
• You want to protect yourself from identity theft
• You’re subscribed to a credit monitoring service
State Law and Security Freezes
Most states have laws requiring credit reporting agencies or credit bureaus, to allow security freezes on credit reports.
However, 9 states (Alabama, Alaska, Georgia, Iowa, Michigan, Missouri, Ohio, and Virginia) don’t have such laws. For these states, all three credit bureaus, voluntarily allow consumers to freeze their credit reports.
Usually a Credit freeze remains in effect until you remove it. Some states however, the freeze expires after seven years.
Fees range from $5 to $20 to freeze, temporarily lift the freeze, remove the freeze, or to replace your PIN. If you’ve been a victim of identity theft, there is no fee to freeze your credit report. Some states also waive the fees for seniors over a certain age. You must contact each credit bureau separately to freeze your credit report at that bureau.
Credit Freezes Aren't Foolproof
Freezing your credit report isn’t a full guarantee against identity theft. If the creditor or lender bypasses the credit check, an identity thief can still open accounts in your name. Also, be aware that not all types of identity theft involve opening new accounts with your identity.
Some types of theft, like credit card shaving, involve existing credit cards and accounts. Finally, the security freeze works for the big three credit bureaus. There are other lesser known credit bureaus that lenders could be using to approve your a la the thief's application.
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