Credit Loan > Identity Theft > Using the Security Freeze to Stop or Prevent Identity Theft

Prevent Identity Theft

In 2004, the Consumers Union sponsored the "Model State Clean Credit and Identity Theft Protection Act", and since then most states have implemented many of the provisions from this model in one form or another. One of the most important provisions of this Act that protects consumers from the effects of identity theft is the security freeze. When a security freeze is placed on your credit report it can not be checked by banks and credit card companies that are trying to establish new credit. This means that even if identity thieves have all of your vital information, even your Social Security Number, they can not apply for credit or use your information to open new bank accounts.

Every state except for Alabama, Michigan, and Missouri have passed a form of the security freeze law, and they are all very similar-- being based on the Consumers Union model. And, since 2007, Equifax, Experian, and TransUnion have voluntarily offered the security freeze in those states that have yet to pass laws requiring it. A security freeze does not affect your credit score, and there are provisions within the laws to allow you to temporarily lift the freeze to apply for credit, or to lift it for individual creditors.

The details vary from state to state, but where I live it costs nothing to place a security freeze and everybody is eligible. In other states it may cost up to $20, and yet others require a police report proving identity theft. To place a freeze on my credit report I would have to write to all three of my credit reporting agencies by certified letter to order the freeze. It would cost me $10 to lift the freeze, even temporarily, and $12 to lift it for a specific creditor. In my case, the freeze would be permanent until I specifically requested it to be lifted, but details vary from state to state.

A security freeze means that only a very few selected parties can view your credit report information. Current creditors and collection companies acting on their behalf can still view your credit information under a freeze, and government agencies can view it for certain purposes. But, employers, credit card companies, banks, and thieves can not view the information contained in your credit report. The security freeze is a big help to people who are concerned that they are, or may become, victims of identity theft.