Institute of Consumer
Financial Education
Institute of Consumer
Financial Education

Should you freeze your credit files? ICFE says YES!

Use credit file freezes as a way to keep credit-based spending in check!
Credit file freezes now available to all consumers

San Diego, CA. - Effective November 1st, 2007 the three major credit reporting agencies - CRAs - (TransUnion, Experian and Equifax) will allow all consumers to freeze their credit files, regardless of whether or not the consumer was a victim of identity theft. TransUnion was the first of the CRAs to announce the new policy quickly followed by Experian and then Equifax. Credit file freezes are free to ID theft victims (a police report must accompany the free request) and will cost $10 to any and all consumers who are not victims.

ICFE promotes credit freezes for all consumers as a way to help insure privacy, protect private information and guard against credit theft in addition to using credit file freezes as a way to keep credit-based spending in check. Some thief can still get a driver's license in a consumer's name and maybe a cell phone, but they won't be able to get any new credit, if the files are frozen.

Some critics argue credit freezes hurt consumers and it slows down the time it takes to get credit when it is really needed. This is a very weak argument coming from those who are against giving consumers the un-encumbered right to restrict who has access their personal credit files.

Credit file freezes are easily done by sending a letter to each of the three major credit reporting agencies. It must include a $10 administrative fee, some identification confirmations (copy of a driver's license etc.) and the requests were sent via Certified Mail with a return receipt. Only the initial request has to be sent Certified Mail, the temporary lifts can be done via telephone.

Within a week, Experian, Trans Union and Equifax had acknowledged the freeze request in writing and may also send a copy of the credit report. Also included was a PIN number which must be used when requesting a temporary unfreezing or "lift".

The temporary lifting procedure is easy and can be done over the phone. The three CRAs send detailed instructions on how to allow temporary access to some creditors. In most instances, temporarily unfreezing a credit report over the phone a consumer would need a credit card, for the fee and the PIN. The temporary lift can be for a few days or a week. Trans Union sometimes provides consumers with a code to give to the creditor for temporary view of the credit file.

Any consumer who takes the time to freeze their credit files knows in advance it will cause some minor delays and there may be inconveniences in getting a quick credit approval, so the argument that it prevents consumers from getting credit is indeed specious. It may even prevent them from borrowing and spending. Lendersand also some card issuers are concerned about credit freezes because they might serve as an impediment to easy plastic and impulse purchases (such as expensively financed new cars).

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