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What is a Credit Freeze and How Can You Activate Fraud Alerts?



credit freeze

What is a Credit Freeze & Why Should I Do This?

A credit freeze is a security measure that prevents new creditors from accessing your credit file. If you are a victim of identity theft or fraud, it can help you prevent fraud.

Credit freeze protection is not available everywhere in the United States. It is limited to people who were residents of one of these states at the time they became a victim of identity theft or fraud. There are three types of credit freezes: personal, medical, and employment. Each freeze is free and available to everyone no matter whether they have been the victim of identity theft or fraud.

What the FTC Says

According to the Federal Trade Commission, 1.4 million cases of identity theft will be recorded in 2020, up from 650,000 cases reported in 2019. This is roughly one in every three persons in the United States.

A cyber-criminal can use the information they receive to open credit cards or bank accounts in your name, apply for loans, and engage in a range of other activities that can seriously ruin your credit. This can be a significant source of frustration and stress for the victim. If you suspect that your identity has been stolen or that your information has been compromised, you can immediately take these two simple steps:

  1. Requesting a fraud alert and
  2. A credit freeze.

How to Freeze Your Credit to Avoid ID Theft or Fraud

Credit freezes are a way to protect your credit from being accessed by potential ID theft. With a credit freeze, no one will be able to open new lines of credit in your name without your express permission. Steps:

  1. Find out which of the three major credit bureaus has your file (Equifax, Experian, or TransUnion).
  2. Contact that bureau and ask for a freeze.
  3. If you are successful in placing the freeze, they will send you an email with instructions on how to “thaw” or temporarily lift it if necessary.
  4. If you are not successful in placing the freeze, contact the next bureau and repeat steps 2-3.

When Should You Request A Credit Freeze?

When it comes to potentially fraudulent activity on an individual credit card, the best course of action is to report it to your credit company as soon as possible. The firm that issued your current credit card will cancel it and provide a replacement card with a new number within a few days. If you have any authorized users on your account, the card issuer may send a new card to each of them.

How to Tell You’ve Been a Victim of Fraud

Credit card fraud is a serious issue. Understanding the basics of how it works and how to reduce the chances of becoming a victim is important. Credit card fraud is when someone steals your credit card information, or makes copies of your credit cards, and uses them for their own benefit.

There are many ways to detect if you’ve been a victim of credit card fraud. When you review your statement, here are a few questions to ask:

  • Is the address on the statement correct?
  • Is the name on the credit card statement correct?
  • Do you recognize the card?
  • Is the phone number accurate?
  • Has been any unusual activity including transactions you didn’t make or authorize?
  • Is the bank’s website correct?
  • Is your routing number correct?

If you believe that you’ve been the victim of fraud, please contact your local law enforcement agency, or the appropriate authorities for your jurisdiction. While detecting fraud in a bank account can be difficult, it is easier to fix if tackled early.

Instructions for Setting a Fraud Alert and Freezing Your Credit

TransUnion, Equifax, and Experian are the three major credit bureaus that, among other things, monitor and offer information about your credit history. To activate a credit freeze, you must call all three and provide the following:

  1. Your Social Security number
  2. A photo ID
  3. Proof of residency

You will also need to contact a bureau to set up a fraud alert.

Conclusion: Why You Should Be Thinking About Freezing Your Credit Today

A credit freeze prohibits identity thieves from creating new accounts in your name. It makes it more difficult for them to obtain loans, gain employment, or open a cellphone account in your name. Even better, a credit freeze has no effect on your credit score. If anyone tries to open a new credit line in your name, they will be denied.

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