Freezing Your Credit Report
You were out and about one day, minding your own business or maybe doing some shopping. When you got home, you realized there was something missing out of your wallet. Your credit card. What is your next course of action? You have called your credit card company and notified them of the theft and put a flag on your credit report, but is there more you can do?
Businesses and creditors have much easier access to your credit reports than you do, unless you are willing to pay a little extra to see it if you do not want to wait once a year to get your free one as the Federal Trade Commission declares you can by law. So when your credit card goes missing or your identity has been stolen, there is one major move you can take that can help protect your credit from being damaged even further by the thief.
A credit freeze can be exactly what you need. When you freeze your credit, you have claimed you will not allow any businesses or creditors access to your credit report. Normally when you alert creditors to the theft of your credit card or other information, your credit report is flagged with a fraud alert. While this is useful and many lenders may do a double take upon seeing the flag, there are plenty other lenders out there who may decide to overlook it, decide it doesn’t matter, or want to make the sale so bad they couldn’t care less whether or not the report was flagged. That means even with a fraud alert, the thief may still be able to buy a new car, open new credit card accounts, and continue using your ID to his or her leisure, leaving you with a slowly degenerating credit report and a lot of frustration when creditors begin demanding their money.
When you request a credit freeze, this no longer becomes a problem. Lenders and creditors cannot overlook your report because they cannot see your report in the first place. That definitely says something is wrong no matter who is looking to get a mortgage or open a credit card account. Without any sort of credit check at all, you are much more likely to keep your credit report safe and thwart the thieves with your information.
You can get a freeze fairly easily and can even do it if you are in no immediate theft danger. This can act as a sort of safety belt should your card ever get stolen – your report is already frozen so you are pretty well safe. All it takes is a letter to each of the three major credit bureaus; Equifax, TransUnion, and Experian, and include all your information so they can verify it is you. If your card was stolen, you should include the police report, and also include $10 each for the charge to place the freeze.
Lifting a freeze can take up to three days. This is one of the only setbacks to a credit freeze. For example, if you see a car you want and it is the perfect car and there is a very limited amount of time for you to buy it, if the credit freeze is not lifted in time, you may not get that car. The same goes for special promotions or other limited-time offers.
Other than a small time setback, a credit freeze can be a big help should your card or identity ever go AWOL.