Identity theft is always a concern in the United States. As of 2008, the United States Congress passed a law that made it possible for anyone in the country to request that her credit report be blocked or frozen. By freezing your credit report you are denying access to any creditor that wants to open a new account in your name, even if that account is for you.

How it Works

You can request a security freeze by using the Internet site, standard mail or a toll-free phone number for Trans Union and Equifax. To place a freeze on an account with Experian you must use either their Internet form or standard mail. You will need to include personal information such as your Social Security number, your current address, your address for the last five years and the reason for your security freeze. If you are the victim of identity theft, then you can include your police report and get your credit freeze done for free. A credit freeze done without being the victim of identity theft will cost you a fee that varies depending on the state you live in. You will be given a special identification number that you will need to lift the freeze if you ever want to open a new credit account.

How it Prevents Fraud

By federal law, a creditor must deny credit to anyone that requests an account in your name if you have a credit freeze on your credit account. This means that no one, not even yourself, can open an account in your name as long as the freeze is in effect. The identification number you are given when you freeze your account can be used to temporarily lift the freeze and allow you to gain access to your credit report and add an account. It should be noted that there will be a charge to lift the freeze and a charge to replace the freeze once your new account is in place. These fees vary depending on your state.

Fraud Alert

A credit freeze should not be confused with a fraud alert. A fraud alert is a flag you can have placed on your credit account that suggests that creditors contact you before allowing any new accounts to be opened in your name. Unlike a credit freeze, a fraud alert is not mandated by federal law and most creditors tend to ignore a fraud alert when it is on a credit account. The only true way to protect your credit and block access to your credit report is by using a credit freeze.

Source:

Should You Freeze Your Credit Report?

Place Fraud Alert On Credit Reports to Prevent ID Theft

Preventing ID Theft

Resource:

Equifax Credit Reporting Agency

Experian Credit Reporting Agency

Trans Union Credit Reporting Agency