Credit Freezing

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Credit Freezing

I'm trying to put a "freeze" on my credit, as I'm allowed to do in Connecticut as of January 1st, thanks to a bill signed by Governor Jodi Rell. "Trying" is the operative word. Not only is there NO INFORMATION WHATSOEVER on the Web sites of the three main credit agencies regarding how to effect the freeze, these companies are very busy actively discouraging people from doing so. Of course they don't want you to freeze your credit...they want you to buy their credit monitoring services. Am I the only one who thinks that putting the three credit agencies in charge of this is like expecting the cat to guard the tuna for someone else without eating it?

Experian has this alarmist and exaggerated anecdote about credit freezing on its Web site:

Dear Max,

I just completed a request via the Web site to "unfreeze" my credit file for seven days. It stated that the seven day unfreeze may take up to three days to activate. I am trying to get an auto loan funded and would appreciate it if this request can be expedited. Is it possible to get the unfreeze done today?

- RKS

Dear RKS,

There are many claims about credit file freezing being the perfect fraud protection tool. As you've discovered, it's not exactly perfect. In fact there are many challenges with file freezing that you'll hear little about from its proponents.

You've come across one important flaw. File freezing is often presented as an instant-on, instant-off process – all you have to do is provide your PIN number. Ironically, providing your PIN number is just the first step.

After verifying your PIN number and other identifying information, the credit file must be looked up and the freeze removed. That verification process takes more than a few minutes.

If your identifying information doesn't match, or you don't have your PIN number, you will need to provide copies of identifying documentation through the mail to prove that you, and not an identity thief, are trying to gain access to your credit history. That can extend the unfreezing process into weeks.

The result is that what is promoted as protecting you from fraud actually prevents you from getting the best interest rate or the loan you need.

A more common issue is not remembering or not having access to your PIN number to lift the freeze. The most common example I hear is from people who lose or break their cellular telephone. To get a new phone, the service provider often must access your credit history. However, you can't get a new phone if you don't know your PIN from memory, and it can be a tremendous inconvenience to retrieve your PIN, or worse, have to mail verification documents to request a new one.

Another serious problem with file freezing is that people don't consider the legitimate uses of credit reports beyond granting of credit. Unless removed in advance, a file freezing can prevent you from getting a cellular telephone or utility service. File freezing also can interfere with your ability to get a job, get an apartment, get security clearance for certain government positions, or obtain some government licenses.

Freezing your credit history is an extreme step with extreme consequences. That is why I only recommend freezing your credit history in extreme cases of identity theft. Any benefit it might provide is often far outweighed by the problems it will cause for you.

Thanks for asking.

Oh, and by the way...in a similar vein, the bran cereal industry warns you that if you don't buy and eat bran cereal immediately, you'll die. Tomorrow.

TES



Feedback for Credit Freezing

1 Comment

I froze my credit a couple months ago and have been suffering the effects. This is quite possibly the worst advice I have ever taken! To all those out there, be VERY wary of what you are getting yourself into.

It sounds simple, and in theory it is. Unfortunately, in reality you cannot lift the freeze as easily as they make it sound. It involves sending massive amounts of identifying paperwork (sketchy to send via mail), paying a fee and then waiting upwards of three days to get it lifted. As a matter of fact, I tried to lift mine two weeks ago. Still waiting. And don’t even think about contacting the credit bureaus when something goes wrong. You literally cannot speak to a representative at Experian. I even went so far as to call the headquarters and was told specifically that there was no one to help me, that I would need to send an additional letter via snail mail. How progressive of them.

I HIGHLY discourage doing this. Judging from the problems I have encountered, it would not be easy to obtain credit in an emergency. In fact, it would be damn near impossible.

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