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| The Basics | Identity stolen? Freeze your credit report
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Anyone can put a fraud alert on their credit reports, but a freeze goes farther -- if your state offers it.
By Bankrate.com
Since 2003 all California residents have had the right to freeze their credit reports, prohibiting credit from being issued in their names. This was a first in the United States. Now four more states offer their residents the same rights: Louisiana, Texas, Vermont and Washington. However, Texas, Vermont and Washington limit this opportunity to those who have been the victim of identity theft or a security breach.
And over the next year, the states of Nevada, Connecticut, Illinois, Maine and Colorado will begin to offer all their residents -- or, in some cases, just victims of identity theft -- the right to place a freeze on their credit files.
Anyone can ask the three major credit reporting agencies to place a fraud alert on their credit reports. Fraud alerts are supposed to alert you when someone applies for credit in your name, and they signal creditors to contact you for permission to issue credit in your name. Residents of any state can put a fraud alert on their reports. Creditors, however, aren't required to abide by or even check the alert.
A credit freeze goes a step further. With a credit freeze, no one can open any form of credit in your name. Your credit file is off limits to potential lenders, insurers and even potential employers. Here's how it works.
When you apply for a loan, credit card or cell phone, the company issuing credit contacts one of the three credit-reporting agencies and requests to see your credit file. If you have a freeze on your account, the company will be told that it cannot see your credit file because your account is frozen. At this point, most companies would not allow the loan, issue the credit card or activate the cell phone.
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But this does not mean that you won't be able to get credit for yourself or allow potential employers to run a background check. The three credit bureaus assign a personal identification number for you when you freeze your report. Using this PIN, you can lift the freeze when necessary.
With a credit lock-down, a criminal can have your name, birthday and Social Security number -- but it won't matter. No credit will be issued.
How it's done
To lock down a credit report, consumers must contact each of the three credit-reporting agencies. For the majority of states, there is no cost if you are a victim of identity theft, as long as you have a report from either the police or another law enforcement agency. California residents who are not identity theft victims must pay $10 to freeze each credit report, or a total of $30 to freeze their files at the three credit bureaus.
None of the three bureaus charge to permanently lift the freeze, but there are fees for a temporary lift -- even for identity theft victims.
| Costs of freezing credit files | | State | Date law effective | | Who can freeze their file | Cost of freeze | Cost to temporarily unfreeze | | California | Jan.1, 2003 | | Any consumer | No fee for identity theft victims; $10 for others to freeze at each agency($30 total) | $10 for a temporary date-range lift per credit reporting agency ($30 total); $12 ($36 total) to lift for one creditor per agency | | Texas | Sept. 1, 2003 | | Identity theft victims only | $8 to freeze; placement at one credit reporting agency must be honored by all | No fees to remove | | Louisiana | July 1, 2005 | | Any consumer | No fee for identity theft victims or persons age 62 or older; $10 for others to freeze credit at each credit reporting agency ($30 total) | $8 for a temporary lift per credit reporting agency ($24 total) | | Vermont | July 1, 2005 | | Identity theft victims only | No fees | No fees | | Washington | July 24, 2005 | | Identity theft victims only, including those who receive notice of a security breach of computerized personal information | No fees | No fees | | Nevada (.pdf) | Oct. 1, 2005 | | Any consumer | No fees for identity theft victims; $15 for others to freeze at each credit reporting agency ($45 total) | $18 for a temporary lift per credit reporting agency ($54 total); $20 to lift for one creditor per agency ($60 total) | | Connecticut | Jan.1 2006 | | Any consumer | $10 to freeze at each credit reporting agency ($30 total) | $10 to lift temporarily or permanently per credit reporting agency ($30 total); $12 to lift for one creditor per agency (total $36) | | Illinois | Jan.1 2006 | | Identity theft victims only | No fees | No fees | | Maine | Feb.1, 2006 | | Any consumer | No fees for identity theft victims; up to $10 for others to freeze at each credit reporting agency ($30 total) | $10 to lift temporarily or permanently per bureau ($30 total); $12 to lift for one creditor per bureau ($36 total) | | Colorado | July 1, 2006 | | Any consumer | No fee for first freeze; $10 to place a second freeze | $10 to lift temporarily or permanently per credit reporting agency ($30 total); $12 to lift for one creditor per agency ($36 total) |
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MSN Money's editorial goal is to provide a forum for personal finance and investment ideas. Our articles, columns, message board posts and other features should not be construed as investment advice, nor does their appearance imply an endorsement by Microsoft of any specific security or trading strategy. An investor's best course of action must be based on individual circumstances.
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