Articles - Archived Feature

A Better Way to Protect Your Identity

There are many services you can use to protect your identity these days, most of them for a fee, and not all of them are as secure as you might think. But there is one (often overlooked) way to protect yourself, and it's probably the most secure and effective method out there.

It's called a credit freeze. A credit freeze enables you to seal your credit reports so that no one—not even you—can open new credit in your name. Even if someone has all your identifying information, they still cannot open credit.

In North Carolina, a credit freeze is absolutely free when you make your request via the Internet, and a mere $3 per reporting agency (so $9 total) if you request by mail or phone. But make sure to contact all three agencies, otherwise your credit isn't really "frozen" and someone can simply check another reporting agency. You can find out more on the agencies' respective websites: www.freeze.equifax.com, www.experian.com/freeze and www.transunion.com. Note that even this method of identity protection is not absolutely foolproof, but it is probably your best bet.

There is a hitch you should consider before freezing your credit. If one day you set your sights on a new car, decide to refinance your mortgage, or choose to open credit for any other purpose, you'll need to lift the freeze at least three days before your purchase. You can choose to lift the freeze with all three reporting agencies (Equifax, Experian and TransUnion), or, even better, find out which bureau your lender uses and lift the freeze only with that bureau. (Just be sure to refreeze your credit again after the inquiry.) This enables the merchant to research your credit history, and you to keep your credit as safe as possible.

Is a credit freeze different from a fraud alert? Yes. An initial fraud alert simply places a red flag on your credit file and is sometimes ignored by certain lenders (though it shouldn't be). An alert also expires 90 days after you put it in place, so you must remember to renew the alert every three months to keep it active. (Unless it's derived from a police report, of course, in which case the alert stays active for seven years.)

A freeze, on the other hand, never expires until you lift it. To lift the freeze, simply contact each reporting agency and use your assigned PIN to "thaw out" your reports. This service, again, is free if you make the request online, and free once more when you re-freeze reports. Or, you can set up a one-time, temporary window for your report to be available and never have to worry about the re-freezing part.

The one downside to protecting your identity through a credit freeze is the fact your current credit cards are not protected. Credit already established in your name is yours to use (or anyone else's, if they're posing as you). Plus any of your current lenders can check your reports to periodically review your status. Overall, though, freezing your credit is an efficient, cost-effective and highly secure way to keep your identity—and your credit—safe and out of harm's way.