Are you concerned about identity theft or the reported mega-data breaches that have recently made headlines? You might want to consider placing a credit freeze (also called a security freeze) on your credit reports.
What is a security freeze and why does it work?
A security freeze allows you to restrict access to your credit report so that new accounts can’t be opened in your name. This type of fraud is difficult to detect because the bills for the new accounts go to a different address, so the consumer doesn’t know there’s a problem until contacted by debt collectors. If there’s a security freeze on your credit report, potential creditors can’t check your files without your permission, preventing someone else from opening accounts in your name. A security freeze will not protect your existing accounts—it’s important to monitor bank accounts, insurance statements and credit card statements on a monthly basis.
Does a credit freeze affect my credit score?
No, and it will not prevent you from opening new accounts, buying insurance or entering into other transactions which would require a credit check. The freeze will need to be lifted temporarily during these times, or for specific entities, so that your credit reports can be properly accessed.
Who can see my credit report if it’s frozen?
Your existing creditors or debt collectors acting on their behalf will still be able to access your report, as well as government agencies that have a court order.
How do I place a credit freeze?
You will need to contact each of the three nationwide credit-reporting companies—Equifax, Experian, and TransUnion. You will be asked to supply your name, address, date of birth, Social Security number, and other personal information. The fee in Michigan is $10.00 for each company. After your request is received, you will be sent a confirmation letter containing a unique PIN or password that will be needed if you decide to lift the freeze.
Does a security freeze guarantee that I will not be a victim of identity theft?
While a security freeze can help keep an identity thief from opening most new accounts in your name, it will not prevent all types of identity theft. It will not protect you, for example, from an identity thief who uses your existing credit cards or other accounts. There are also new accounts, such as telephone, wireless and bank accounts, which may not require a credit check. And, if identity theft is already going on when you place the security freeze, the freeze itself won’t be able to stop it. While a security freeze may not protect you in these cases, it can protect you from the vast majority of identity thefts that involve opening a new line of credit.
Who is at special risk for identity theft?
People between the ages of 18 and 24 have the highest rates of identity theft. People over the age of 65 are less likely to be victims, but spend more time resolving the issues when an identity theft occurs. In general, people should not carry sensitive information in wallets and purses. Cards that have names and social security numbers on them open the door to identity theft if stolen.
Placing a security or credit freeze on your credit reports is a highly personal choice. It is particularly appropriate for those who are concerned about identity theft, or those who don’t want to spend hours or even days cleaning up a credit mess. You may want to consider setting up a credit file for your minor children and putting a security freeze on the file to assist in protecting the child’s social security number.
As always, if you have questions about any of the information listed above, please feel free to contact us here at Mierendorf. We’re always happy to help!