CreditCards.com

Protecting yourself, Research, regulation, industry reports

Do you know what a credit freeze is?

Emily Crone

Over the last few months, I’ve blogged about identity theft with frequency. I’ve written about how identity theft protection services often don’t work, the Bonnie and Clyde of identity theft, my identity theft hero and new methods thieves are using to steal information, such as smishing and tax rebate scams. Identity theft is incredibly prevalent — the FTC recently estimated that there are 8.3 million identity theft victims in America each year — but even with all the press it gets, a new survey reveals that consumers aren’t doing everything they can to fight it.

The survey, conducted by the company eCreditFreeze in February 2008, found that over 50 percent of respondents had no idea they could place a freeze on their credit reports, which prevents new lines of credit to be opened without a consumer’s consent. That corresponds with a CreditCards.com survey conducted in November 2007, which found that only one third of Americans know what a credit freeze is.

Once eCreditFreeze’s respondents were informed about credit freezes, 67 percent said they were somewhat or very likely to place a freeze on their reports. Those who weren’t interested in using a credit freeze (also called a security freeze) said it was too complicated or they needed more information.

While Americans aren’t credit-freeze savvy, they are at least taking other steps to ward off identity theft. The survey found that 87 percent of people regularly review monthly bank and credit card statements, 86 percent guard personal information on the phone, 64 percent shred personal information and 66 protect their online information.  But as the survey’s press release points out, many identity theft occurrences are the result of company data breaches, which consumers can’t prevent. This means regular precautions aren’t always enough. Only a credit freeze will preemptively protect your credit standing, forcing a company to contact you to ensure it is indeed you who applied for that new credit card or car loan.

Credit freezes don’t always work perfectly, however, as some creditors grant credit before verifying consumer information. eCreditFreeze, a company that offers low-cost identity theft prevention services, has suggested to the FTC that new legislation be enacted in which punitive and actual damages would be taken against “any lender where a consumer becomes a victim of ‘new account’ identity theft while their credit report is frozen,” the press release says.

If you one of the many Americans who don’t know about credit freezes, ditch your ignorance. To place a credit freeze, you must send a written request to each of the three credit bureaus: Experian, Equifax and Transunion. Click on those links to see which information and fee you must send to each bureau. The average cost of placing a freeze with each bureau is $10, though it varies state to state. When your freeze is placed, you’re given a PIN number that you will need to have when you want to lift the freeze. Most freezes remain on file permanently until you request its removal in writing, though in some states, the freezes expire in seven years. Freezes can also be temporarily lifted.

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, we ask that you do not disclose confidential or personal information such as your bank account numbers, social security numbers, etc. Keep in mind that anything you post may be disclosed, published, transmitted or reused.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.

  • I have heard about credit freeze but i had no much knowledge of what is all about that. Now i understood what is credit freeze and how can we avoid or release it. Thank you for giving such a useful information.