Credit Freeze- Complex But Effective?

Credit freeze is different from placing your credit report on fraud alert because a freeze completely blocks out all inquiries, even from the owner of the credit file.  The process of placing your credit file on “freeze” is also more complex because it cannot be done over the telephone.  To ask for a “freeze”, a consumer must write the credit bureau, send the letter via registered post mail, enclosed with the necessary documents.  There is also a fee of $10 to $12 from each credit bureau.

What if you want to apply for a new account?  Obviously, a prospective creditor would not be able to access your file.  Thus, before submitting application for new credit (ex. loan or credit card), the credit file owner must request the credit bureau to lift the “freeze”.  Again, this cost $10 or $12, depending on the credit bureau.  To place it back on freeze, the consumer must also pay the fee.

Some people are not open to the idea of credit freeze.  But is it really worth it?  Can it really protect you from the threat of fraud and identity theft?

Fraud Alert vs. Credit Freeze

A fraud alert should move a prospective creditor to notify the owner of the credit file, if someone is trying to apply for new credit.  By doing so, the credit report owner can confirm whether he/she has submitted an application.  If not, then it alerts the consumer that someone is trying to open an account using his/her identity.  Nevertheless, some creditors may choose to ignore the fraud alert and simply approve the application without notifying the credit report owner.

With a credit freeze, the prospective creditor would not be able to make a credit report inquiry at all.  Instead, the creditor will get a message from the credit bureau that the file has been placed on “freeze”.  Again, only the credit report owner can unfreeze it.

Another thing about credit freeze is that it is permanent, unlike a fraud alert which only protects the report for 90 days.  When you request for a credit freeze, it will stay inaccessible to everyone unless you make a new request to “unfreeze” it.

Hence, if you suspect that someone may have stolen your personal information, it is well worth the effort to request for a credit freeze.  Just make sure that you will be freezing your credit file with all the three major credit bureaus.  Otherwise, an inquiry can be made with the other bureaus where you did not request for a freeze.  Despite the fees involved, paying for a little over $30 can be considered a valuable expense, considering that your file will be protected.

 

About the Author:

Suzy Vanstrusen is a credit analyst and a writer on the website EZCreditRepairSolutions.com. She has been providing consumers with tips and wise information about credit repair as well as helping you out more with your bad credit loans.  Copyright © 2010
 

Leave a Reply

Your email address will not be published. Required fields are marked *

*