Credit Freeze – What It Means To Freeze Your Credit Report

Several states in USA now allow consumers to place a credit freeze on their credit report. In simple terms, this means an individual reserves the right of access to their credit report,only temporaril lifting the credit freeze when required. By placing a freeze on your credit report, you are preventing an identity thief from opening credit accounts in your name. If potential creditors, future employers or anyone else needs access to your credit history, you will have to specifically grant them this access. Current creditors however will continue to have access to your report, irrespective of you freezing your credit. Be rest assured, freezing credit does not have any effect on your credit score at all.

How To Credit Freeze – Following Security Freeze Laws

Every individual state in USA has its own credit freezing laws and consumer must follow state laws to know exactly how to freeze credit. Some states provide credit report freeze protection to all residents; while others only allow identity theft victims to place a security freeze. In most states, identity theft victims are not required to pay any fees when freezing their credit history, however all other consumers may be required to pay a fee, which is usually about $10. This fee is payable to each of three credit bureaus – Experian, Equifax and TransUnion. Pay the fee to each credit reporting agency individually and place a remember freezing credit with all three is essential or your credit history might still be accessible by others.

Freezing Credit Report Vs Credit Fraud Alert

Freezing your credit report and placing a credit fraud alert on your credit file are both ways to minimize further damage to your credit history. If you have had your identity stolen and have placed a fraud alert on your credit file, potential creditors are required to be doubly careful as there may be an attempt to obtain fraudulent credit. However, often this means a creditor simply gets in touch with you to verify your identity or employs “reasonable policies and procedures” to do so. This however is not always a foolproof method as the fraudster may easily pretend to be you and have access to all the identifying information about you.

Freezing credit reports on the other hand means third parties, including potential creditors cannot access your credit history. Therefore, a fraudster cannot apply for new credit and therefore providing you greater protection against a credit scam.

Freeze Credit And Stop All Credit Fraud?

Unfortunately, credit freezing is not a magical solution to all your credit fraud problems. When you freeze credit, you are taking a step towards preventing future credit scams and fraudulent credit applications. However, freezing credit cannot protect you from an ID thief using your current credit accounts, unless you place a block on them. Also, several credit accounts, especially for household services like electricity, telephone or internet, can be opened without a comprehensive credit check. In such a case, even if you freeze your credit report, you cannot prevent the ID thief from pretending to be you.

With the growing occurrence of ID theft, freezing credit is definitely an option worth considering. However, do not rely on a credit freeze to protect you alone. Make sure you take other measures to prevent and protect yourself from credit fraud and scam.

There are several factors that work to evaluate a FICO report and almost every factor has a specific impact on a FICO report. The factor that badly affects your FICO score is bankruptcy as this single factor can immensely lower your credit score. Aside from bankruptcy, there are many other factors that can decrease your credit score and some of them are as follow.

If you don’t make payments on time, it can lower your credit score considerably and if you are quite punctual making payments, it can be very helpful to improve your credit score.

When it comes to the kind of credit account, it may not be as troublesome as the late payment, but it can show some adverse affect on your credit report.

You must also keep this fact in mind that this is debt level which helps to determine FICO score level.

The thing that serves as the most important factor in determining credit score is bad credit behavior. It is good behavior that most of lending companies consider before approving some loan for you.

It is kept secret what are the exact calculations are used to make credit scores, but there are several things which point out how credit scores are calculated and your previous history about making payments in time, as this only factor makes up nearly 35% of your credit score. There are many other factors that can badly affect your credit score that include foreclosures or a tax claim.

Aside from the above mentioned, a credit report has information about your current and previous addresses, telephone number, date of birth, employment information and social security number. There is also a section which includes information about matters of public record like tax liens, bankruptcies and civil judgments. In short, a credit report is a credit history of an individual that includes information related to almost each and every aspect of this person’s financial life.

But the question is how an individual’s credit report can be obtained or is it lawful to obtain an individual’s credit report without his/her permission? There is a lot of information related to an individual’s credit history in a credit report and that’s why it has been declared unlawful to obtain an individual’s credit report without his/her permission.

Under federal law, any person (under false pretense) who willfully and knowingly gets information on a consumer from a credit reporting company e.g. get a credit report without his/her permission, this person will be fined under Title 18 US Code, or to be imprisoned for at least two years, or may get the both.

However, someone with a legitimate business need can be given access to your credit history and they include companies who considering granting you credit, insurance companies, landlords, employers (but with an individual’s consent), state or local child support enforcement agency, for account monitoring purposes for the companies with which you have a credit account and any government

Usually, written consent is required to an employer or prospective employer to obtain an individual’s credit report. Similarly, different potential creditors seek individuals’ permission to review their report.  However, an individual’s permission is not required when inquires are done regarding pre-approved credit offer.