Just four years ago, only four states gave consumers the right to freeze their credit files. Today, 35 states allow credit freezes, and 8 allow them for victims of identify theft.

A “security freeze” means your credit file cannot be shared with potential creditors and no one can open any form of credit in your name. But that doesn’t mean you won’t be able to get credit for yourself. You can lift the freeze when necessary using a personal identification number.

So if your credit files are frozen, even someone who has your name, birthday and Social Security number should not be able to get credit in your name. In exchange for this added security, it will take slightly longer to get your own new credit approvals.

One step down from a credit freeze is a “fraud alert.” Residents of any state can ask the three major credit reporting agencies to place a fraud alert on their credit reports, which is supposed to alert you and ask your permission when someone applies for credit in your name. Creditors, however, aren’t required to abide by or even check the alert.

Using credit freezes or fraud alerts are a matter of personal choice, but keep them in mind as an option if you would like to protect your private information and guard against credit theft.

Click here to find out your state’s policy on credit freezes and how to get a freeze initiated.

Financial Freedom can help you gain control of your credit through the Credit File Correction Kit.

This entry was posted on Friday, June 29th, 2007 at 1:05 pm and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.