NDSU Extension Service - Ramsey County

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What is a Credit Freeze?

What is a Credit Freeze?

           In our high tech world, it is possible to share your personal information a multitude of time in just one day – write a check, pay with a credit card, order online, visit a health clinic, make a donation to a charity, etc. etc.  All of which adds up to a great potential for identity theft.  

          Unless you live in a bubble, it is hard to totally prevent identity theft.  Our goal as alert consumers is to have safe guards in place that make it more difficult to steal your identity.

          Monitoring your credit regularly is one what to present identity theft.  

With a little planning and time, you can monitor your own credit reports and accounts for free. You can check your financial statements every month either online or by opening your mail. You can also order your free credit reports every 12 months, or alternate several times a year at http://annualcreditreport.com.

          Another very important ID theft prevention tool available is called a Credit Freeze and/or Security Freeze.  You have the right to put a freeze on your credit report that prevents anyone from pulling it to issue new credit. One of the most difficult type of ID theft to clear up is when someone opens new credit in your name and then misuses those accounts. In the credit origination process, access to a credit report is critical for a lender to make a risk assessment. Because a credit freeze effectively stops any access to the credit report, it places a block in the process of issuing credit.

          Credit freezes are frequently viewed as the most effective way to prevent financial identity theft. Each year in the United States, approximately 15 percent of all cases of identity theft are cases of new account origination identity theft, according to the Federal Trade Commission.       In order to thoroughly freeze access to one's credit report, it is necessary to contact each of the three major credit reporting agencies.

          A security freeze puts a lock on your credit report so that in order to open new credit, you have to temporarily unlock your report. A security freeze does not prevent you from being able to pull your own credit reports at any time, nor does it prevent business entities you already have a relationship with (your mortgage, your credit cards, etc.) from being able to review your credit.

          For more information and ideas about protecting your identity, check out this website from the FTC: http://www.consumer.ftc.gov/topics/protecting-your-identity

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