Protect Yourself From Identity Theft With a Credit Freeze

Posted in: All Videos, ID Theft, Credit
By ExpertRealEstateTips
Apr 28, 2009 - 12:07:12 PM

Credit Freeze May Help Identity Theft

Summary: A security freeze, also known as a credit freeze, bars a credit reporting bureau from changing any of the information in an identity theft victim's credit report without permission. It's new and it may be key to stopping identity theft in its tracks.


 Nearly 40 million Americans have had their personal information compromised or stolen since the beginning of the year.

The worst thing about having your identity stolen is feeling victimized.

"You've been invaded. Someone has been able to get your information and begins to use it," says John Gaudette, Illinois State Public Interest Research Group.

While you can put a fraud alert on your credit report if your identity has been stolen, fraud alerts won't stop identity theft.

"They're a way of allowing you passively to know who is accessing your account. But people can still get your credit report and do things to damage your credit," Gaudette says.

But a new law might stop identity theft in its tracks. Last month, Governor Blagojevich signed House Bill 1058 which permits identity theft victims to place a "security freeze" on their credit reports. A security freeze, also known as a credit freeze, bars a credit reporting bureau from changing any of the information in the identity theft victim's credit report without permission.

"What makes the credit freeze so important, is that it gives all the power, finally, to the victim. All these other laws basically gave tools to credit reporting agencies and others to look at id theft," Gaudette says.

The real question is why didn't the state pass a law that allowed anyone to enact a credit freeze or a security freeze on their credit history? The way it stands now, if you're not already a victim, you can't enact a credit freeze to protect yourself.

The answer is that retailers and car dealerships and other companies that sell to consumers love instant credit. And if you freeze your credit history, you can't get instant credit.

"The bottom line of any business to make a profit. The best way to make a sale is instant credit, to get people in and get the product purchased," Gaudette says.

The other part of House Bill 1058 requires companies to contact consumers if they lose their personal information. But these gains could be lost with the new federal credit freeze legislation winding its way through congress.

"If you lock your front doors and leave your other doors open, you're not any more protected than you were before. Our credit freeze legislation allows you to lock all the doors. And it protects you completely. The federal legislation leaves too many doors open," Gaudette says.


Illinois State Public Interest Research Group (illinois pirg) 180 West Washington Blvd. Suite 500 Chicago, IL 60602

Worried about someone stealing your identity? Here are 10 tips to reduce your risk of identity theft from the Illinois State Public Interest Research Group.

  1. Security your personal information. Guard your mail, shred and destroy bills, carry only the information you need, and use effective passwords for your financial accounts.

  2. Protect your social security number. Don't carry your social security card, request alternate identification numbers and don't use your social security number as a password.

  3. Tell companies not to sell or share your date. Make sure you call 888-5-opt-out to stop creditors from sending pre-approved offers. Then, opt out of information sharing at your bank and other financial services policies.

  4. No "phishing" or "pharming." never reply to an email or pop up message that asks for personal information like account numbers or passwords and never click on the link to these messages.

  5. Be careful on the internet. Never use your debit card, deal only with reputable companies, check privacy and security policies of websites and be sure to install firewalls and virus-detection software on your computers and keep them updated daily.

  6. Keep track of your financial accounts. Check during the month for fraudulent charges and report suspicious changes immediately. Be sure to get your statements on time and make sure you call your creditor if your bill doesn't arrive. Going online with your statements can help.

  7. Monitor your credit report. Use to get your free credit report from each of the three major credit reporting bureaus each year (it's the only website you can get this on.) Check for errors, for new active accounts or debts that do not belong to you.

  8. Take control over your credit. If you've been victimized by identity theft, and you live in Illinois, California, Maine, Vermont, or Texas, you can put a credit freeze on your credit history. But if you're in the military, no matter where you live, you can place an active duty alert on your credit file. You can place a fraud alert on your account that requires creditors to take additional steps to verify an applicant's identity before issuing credit in your name.

  9. Demand strong protections. Just say "no" if someone asks you for personal information that seems unnecessary for the transaction. Don't let anyone take your credit card someplace you can't see, even for a moment. Talk to your employer about what policies it uses to protect your identity.

  10. Be active. Write your congressional representative to request tougher laws that better protect consumer's personal information.

Need personal finance advice or real estate advice? Send your questions to Ilyce Glink:

Published: Aug 4, 2005