By now, most people are familiar with the threat of identity theft and the uses to which the thieves might put your stolen identity. This includes using your personal information to charge goods and services on a new bogus credit card.
There are the usual preventive measures you can take, such as keeping personal information close to your vest, using passwords, and shredding financial documents you no longer need. You can also get regular credit reports from the three major credit bureaus—Equifax, Experian, and TransUnion—and/or sign up for a credit monitoring service. These latter actions certainly have some value, but they may only go so far as to help you discover that the “horse is already out of the barn” rather than help you to prevent the theft in the first place.
Another theft prevention approach that may be less familiar to most consumers is the credit freeze (sometimes called a “security freeze”). Although the term sounds as if you are left out in the cold as far as your credit is concerned, when properly used it can give you the comfort of some additional financial security and leave would‑be thieves out in the cold instead.
You can put into place a credit freeze by notifying the credit bureaus, providing certain personal information, and paying what should be a modest fee. When the freeze is in place, it stops all potential creditors from seeing your credit report and credit score unless you decide to “thaw out” your credit with the credit bureaus by using a personal identification number. Since any potential creditor considering a thief’s application for credit will not be able to check the real consumer’s credit report or score while the freeze is on, the creditor will not be able to extend credit, and this prevents the new bogus account from being created.
Credit freezes are not a fail‑safe wall of protection against identity theft, but they do give you another defense in the fight. They also do not entail significant inconvenience or cost. Even with a freeze in place, you can use any of your existing sources of credit. A credit freeze especially makes sense if you have no plans to apply for new credit any time soon. But even if you wish to do so, for another reasonable fee you can lift the freeze temporarily for up to 30 days, during which time credit checks can be made in the usual manner by your potential creditors.