Credit freezes are often confused with fraud alerts, but they are really nothing similar. A fraud alert is when new creditors are alerted that you may have been the victim of fraud, and the creditor is required to take additional verification steps that prove they should be accessing your credit and opening an account for you before they can issue the credit. Fraud alerts also remove you from receiving prescreened offers for insurance and credit.
A credit freeze is something a consumer can place on his or her own credit report – depending on where in the country you live. Some states allow anyone to put a freeze on their credit; while others only allow the victims of identity theft to freeze their credit. Here are other tips that will help you understand the basics of a credit freeze:
Even if your credit is frozen, your report can be updated by your existing creditors. Don’t think that by placing a freeze on your credit report you can slide by with a few late payments that won’t get reported! A frozen credit will only prevent new creditors from accessing the information in your report. If your existing creditors want to check your credit report to see how you are paying your other creditors, they can. A freeze of your credit is made with individual credit bureaus. If you freeze your credit with Experian, it won’t be automatically frozen through TransUnion or Equifax. You have to freeze each manually if you want all access to be frozen. “Thawing” a credit freeze; in other words, removing the hold you have on your credit report, takes several days to take effect (unless you live in Utah where they’re able to unthaw in 15 minutes!) If you plan to apply for new credit or apply to rent an apartment or apply for a new job; you will want to thaw your credit a few days before you’ll need it to be sure that these authorized people will have access to the report. Freezing your credit does not prevent you from using your credit cards. It’s not like “freezing” the credit card or “freezing” a bank account. It literally only effects the ability of a new lender to look at your credit report. While the intent of a credit freeze is usually to prevent identity theft and fraud- there are still numerous ways around it that could result in you becoming the victim of identity theft or fraud, despite having a freeze on your credit. For example, in the event a lender doesn’t try to check your credit before issuing a new account, new credit could be opened in your name if the criminal had the right details to do so.
Hopefully, this list has given you some useful insight into what a credit freeze is, and what it is not. Using a credit freeze may help reduce your potential for being the victim of identity theft, but if you are hoping to end the prescreened credit card offers or have creditors alerted to possible fraud activity when they begin to open a new account for you; chances are you are looking for a fraud alert service and not a credit freeze.
By: Debbie Dragon
Posts Tagged ‘Creditor’
Understanding Frozen Credit
April 19th, 2010The Perfect Credit Dispute Letter
April 7th, 2010
The key to repairing your bad credit is the Credit Dispute Letter. You’ve put so much effort (probably a lot of cash too) into eliminating old debts and creating good credit but if you want to rewrite history, credit-wise, you’ve got to convince the credit bureaus to take the eraser to your past. Getting the letter just right requires a lot more than perfect prose. As is so often true with life, success can come from what you don’t say, what you do, how you say it and never forget… timing.
When composing a Credit Dispute Letter remember the old adage: Less it more. Your letter isn’t meant to convince anyone but to point out errors. You are not saying “why” a debt is not listed accurately on your report, but rather “what” is not listed accurately. Start with a simple statement that will explain what you want the the credit bureau to do: On reviewing my credit report, I haved found these discrepancies. Please delete them from my credit report within 30 days as required by law and send me a report of the corrections” – that pretty much sums up everything, doesn’t it. The fact is you don’t need to beg them to remove old credit items, it is there legal responsibility to research anything you say is incorrect and IF they can’t prove it true they must delete it.
Now list virtually everything that could hurt your credit worthiness. It is up to you to decide if you want an item on your report but they probably won’t delete everything, so be aggressive. List the creditor, account number and amount of each item you would like gone. Use no more than three words of explaination: “account never late”, “duplicated account”, or “reported in error” should cover 90% of disputed items. Never say that a credit blemish is from fraud or criminal activity because you are saying that it is reporting true and you will have to prove you aren’t to blame. Say as little as possible.
It is the credit bureaus responsibility to act within 30 days but you want them to know when the clock starts. Send any Credit Dispute Letters certified mail with a signature required. From the moment someone signs for that letter they have 30 days to contact the reported creditors and get a written verification of the bad credit items. Time is on your side and you want the bureaus to know that.
By: Mitchell Torek
