Most states have passed "credit freeze" laws, allowing individual consumers to lock their credit reports and, in theory, reducing their vulnerability to identity theft. While the credit freeze is in place, the credit reporting agency may not give out your credit report unless you explicitly grant permission and confirm your identity using a PIN or password. This makes it harder for the identity thief to open an new account or to get new credit in your name.

Even if your state does not have a credit freeze law, the three major credit reporting agencies now offer freezes voluntarily. To institute a credit freeze, you generally need to send a written request to each of the three major credit reporting agencies. The specific instructions vary from state to state. You can find links to each state’s instructions at The states allow the credit reporting agency to impose a fee to initiate the freeze (usually $5-10 per credit reporting agency but often free to confirmed victims of identity theft) .

If you do freeze your credit report, you will have to lift the freeze whenever you want credit. Under almost all the state laws, you’ll have to pay again each time you want the freeze lifted. This can make opening a new account or even changing your existing service more difficult and expensive. When you apply for the freeze, you will be given the instructions and PIN needed to lift the freeze. In some cases, you’ll have to lift the freeze yourself – in others, you might be able to authorize the merchant to do it for you. Either way, it will take some extra time. It will also make you ineligible for “instant credit” unless you lift the freeze before going to the store.

The credit freeze laws have implications for businesses that use credit reports for purposes other than lending (such as evaluating underwriting risk). Unless the state law has explicitly carved out that usage as allowed (and many but not all states did for underwriting), the business should expect extra paperwork and several extra steps in the process to get permission to view the consumer’s credit report. The law varies from state to state. Check with your corporate counsel for details.

As a consumer, you should also know that a credit freeze will not necessarily keep you safe from identity theft. While most reputable creditors will check your report before issuing credit, some don’t. Identity thieves can still exploit those situations, knowing that you will have to pay the consequences. A credit freeze also will not protect you from exploitation of existing accounts.

If you are at increased risk of identity theft and already have a house, car, phone service and the credit cards you need and you see no near-term need to refinance any of them, a credit freeze might be appropriate for you. If you have few risk factors or will need to legitimately seek credit for yourself soon, a credit freeze could be more trouble than it’s worth. Personally, I do not have a credit freeze on my account. I take normal precautions to make my identity hard to steal in the first place (I have a shredder and use it, I don’t leave financial documents like credit card bills on the kitchen counter, I don’t keep my SSN in my wallet, I use strong passwords, etc) and I check my credit report regularly. To me, the incremental protection of a credit freeze is not now worth the extra hassle and expense.

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