Do you know what credit report freeze is? Credit freeze was initially introduced in November 2007 and today, it has become a popular service to acquire protection against identity theft and fraud. In this article, let’s discuss the process of credit freeze so you can better decide whether you should freeze your credit or not.
Is Credit Freeze the Same As Fraud Alert?
Credit freeze is different from “fraud alert” in many ways. How? First, you can only request for a fraud alert if you suspect that you have been a victim of fraud. Creditors that inquire your report will get a message that your file is on fraud alert. Thus, if they receive a new credit application, the creditor will notify the owner of the credit report to confirm if he/she has submitted a credit application to their company. Nonetheless, some lenders will ignore the alert and approve the application without notifying the report owner.
What about a credit freeze? Once you request for a freeze, nobody can make new inquiries on your credit report. If you want to apply for a credit card or a loan, you must first send a letter to the credit bureau requesting that the freeze be lifted. You must also specify the name of the creditor that can access your report and how long you want the lift to last. Clearly, placing your report on freeze gives you more protection against id thieves who may try to use your personal information to commit fraud.
Why Acquire Credit Freeze
Some people feel that placing credit report on freeze is a hassle. Furthermore, you have to freeze your credit report from all the three credit bureaus in order for it to work. The fact that there is a fee in requesting a freeze and to lift the freeze ($10 to $12 of payment for each bureau) is not very encouraging as well. But is it worth it?
Despite a few inconveniences and the fees, placing your report on credit freeze is still a worthy action. Unless you have plans to apply for credit cards or loans more than once a year, then spending $30 to freeze your report is definitely money worth spent. Just think about how much money you can lose to ID theft or fraud if you leave your credit report easily accessible to all.