Because I strive to be a “do it yourselfer”, I figure that my first line of defense against identity theft is what I can do on my own. My wife and I are vigilant about safeguarding our personal information, especially our Social Security numbers. We own a shredder and use it regularly. We check our credit reports and we each have security freezes placed with all three major consumer credit reporting agencies.
So What is Security Freeze?
The security freeze (also known as credit freeze, credit report freeze and credit lock) locks the individual’s data at the consumer reporting agency until he gives permission for the release of the data. Security freezes are often viewed as the most effective way to prevent identity theft because the freeze, by stopping access to the credit report, blocks all issuing of credit.
If, for example, someone had my social security number and tried using it to open a new and fraudulent credit card, he would not be able to if the credit card company wanted to run a credit check first. Why? Because my credit report is frozen (blocked) and cannot be thawed without my express permission. Therefore, the credit card application would be denied. Of course, knowing that some credit card companies give cards to dead people and pets, the freeze is not altogether fail-proof.
How Much Does a Security Freeze Cost?
A security freeze costs $10 per credit reporting agency for each person. Therefore, for both Janice and me, the cost was $60 (all three agencies for each of us). This is a one time expense unless either of us wants to unfreeze our accounts in which we would need to pay $10 to thaw each account and then the same $10 all over again to re-freeze them.
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Does a security freeze replace identity theft protection?
No. But many of the Identity Theft Protection companies perform services that you can do for free, such as reviewing your credit report. (This is free annually at all three credit reporting agencies at www.annualcreditreport.com. ) Am I saying you don’t need to pay for one of these services? No. One great benefit some offer is walking you through the nightmare of cleaning up the mess after your credit has been stolen. Most of us would need help with that. But I take the $1,000,000 insurance they offer with a grain of salt because any fraudulent expenses should be covered by your credit card company or bank anyway. See Visa’s Zero Liability Policy, which applies to both credit and debit cards, here.
Wouldn’t a federal fraud alert do the same thing?
No. A federal fraud alert expires after 90 days and does not stop the release of a credit report or credit score like a freeze does. Although an extended fraud alert (restricted to ID theft victims) will not expire in 90 days, it will not block access to consumer reporting files like a security freeze does.
Why don’t you simply check your credit report instead?
Think of it like this: checking your credit report is like checking your barn to see if your horses have been stolen. A security freeze, on the other hand, is more like placing a dead bolt lock on the barn to prevent anyone from getting to the horses. Both are valuable, but serve different purposes.
Are there exceptions to this freeze?
Yes. The freeze would not block state and federal government agencies who need access in order to fulfill statutory obligations (such as fraud investigations). Other exceptions to the freeze would be any Identity Theft Prevention service to whom the consumer has subscribed and any insurance agency who needs access for the purpose of insurance underwriting.
Are there other benefits?
Yes, this one is unintended but possibly more valuable than the identity theft protection: the cost and hassle of thawing and refreezing creates a built in safeguard against borrowing money. I like this freeze!
Summary
Because of the cost of thawing and re-freezing, a security freeze is not for everyone. However, it is perfect for us. Because Janice and I have no debt and no plans to borrow money, the cost of thawing and refreezing is not an issue for us. And we have the peace of mind in knowing that we have taken a preventive measure to stop identity theft before it occurs.
Excellent article, Joe. It helped me understand a bit more about how the freeze process works. I didn’t know a lot of that. I don’t freeze my reports, but should probably reconsider it considering my wife and I are done with using our credit for a while. How difficult is the “thawing” process?
PT,
I have never thawed my reports, but, based on my experience with the freeze, it is not entirely hassle free. All three credit reporting agencies were different; I was able to get the freeze with one via a phone call, another required a written request and the third was done on-line.
This being said, it is possible that temporarily lifting the freeze from only one of the credit reporting agencies and for only one spouse would suffice, depending on the credit being applied for.
Thanks for reading!
My wife and I both froze our credit. In MN it is only $5 each time. I have only unthawed once and it was simple. I would strongly recommend it to others! Good article!