One tool available to protect against identify theft is to lock your credit report. It is regarded as more effective than simply placing a fraud alert and can work out less expensive than paying for credit monitoring services. When credit locking facilities were first introduced they were limited to several states. However things have improved and now the three major credit bureaus allow anyone to freeze their credit reports.
When a credit report is frozen or locked it prevents anyone from obtaining credit in your name. However it also has the inconvenience of putting an end to easy credit as ones own applications for loans, credit cards and mortgages will be delayed until the freeze is either temporarily or permanently lifted. With forethought it is possible to request the freeze is lifted prior to applying for credit or employment, but unless this is done a lender will not be able to access your report to grant credit applications. Their refusal will not impact on your credit score though.
There is no federal ruling on locking credit reports and each state has its own guidelines on the costs involved in unlocking reports and on the timeframe. Experian advises there are exceptions. Although a report can be frozen it is still open to collection agencies which hold existing accounts. However it is not open to existing creditors where the account is in good order.
Each of the three major credit bureaus, Equifax, Experian, and TransUnion, now offer online services for consumers who wish to lock their credit reports. Alternatively the service can be applied for by certified mail. It is necessary to lock your credit report with each agency as the information is not necessarily shared between them.
General information required by the bureaus in order to freeze your credit reports include your social security number; current and previous addresses; and in the case of victims of identity theft, copies of police reports. A personal identification number is provided so that you can request your credit report is unfrozen when it is needed.
Costs range from $0 – $20 to instigate a freeze, whilst charges to unfreeze the report range from $0 – $12, dependent on state guidelines. The service is offered free or charge to victims of identity theft. Senior residents of some states can opt for the service free of charge; residents of some states are only charged to unlock their reports.
MSM provide a very useful comparative guideline of fees here.