It looks like the government is finally getting serious about identity theft. A new law that goes into effect in September will make credit freezes free. A credit freeze effectively locks your credit file making it virtually impossible for your identity to be stolen. Historically, credit freezes carried a cost of $5 to $10, and another fee each time the report was 'thawed' (the process of unlocking the file when applying for a loan). The new law not only makes credit freezes and thaws free, it also requires that they be completed within one business day. Due to the cost and the delays involved in thawing a credit report, most people have not taken advantage of this highly effective ID theft defense.

How Do Credit Freezes Work?

In order for a lender to access your credit file, you must first contact the credit bureau and 'unlock' your credit file using a four digit PIN. One bureau already has a mobile app for this purpose, and it is expected that the other two bureaus will follow. Now that credit freezes are free and have a turnaround of just one business day, there is no reason not to use them.

Of course, the key will be in the execution of all of this. The credit bureaus are notorious for lagging behind when it comes to technology and innovation. In this case, however, they have only until September to implement these new changes.

Remember, that you must freeze your credit file separately at each of the three credit bureaus. 

Equifax
equifax.com

Experian
experian.com

TransUnion
transunion.com

Check out another popular article on credit from our archives - 4 Reasons To Get Your Free Credit Reports Each New Year

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James L. Paris 
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