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Identity Theft and Credit Freezes
Identity theft is a growing problem in Charlotte and across our nation. A little known tool that you can
use to help prevent yourself from being victimized is the activation of a credit freeze, also known as a security freeze.
This basically prevents new loans and credit accounts from being issued in your name without your permission.
What is a credit freeze?
Many states have laws that let consumers freeze their credit. This allows a consumer to restrict access to his or her credit
report. If you place a credit freeze in your credit record, potential creditors and other third parties will not be able to
get access to your credit report unless you temporarily lift the freeze. This makes it less likely that an identity thief
would be able to open a new account in your name. Placing a credit freeze does not affect your credit score, nor does it
prevent you from accessing your free annual credit report or from buying your own credit report or credit score.
Credit freeze laws vary from state to state. In some states, anyone can freeze their credit file, while
in other states, only identity theft victims can. The cost of placing, temporarily lifting, and removing a credit freeze
also varies. Many states make credit freezes free for identity theft victims, while other consumers pay a fee, which is normally
less than $20 for each of the credit reporting agencies. If you want to freeze your credit, it would mean placing the freeze
with each of three credit reporting agencies, and paying the fee to each one.
You can find more information about credit freeze laws specific to your state including information on how to place one at
the following link:
Consumers Union's Guide to State Security Freeze Laws
Who can access my credit report if I place a credit freeze on my credit reports?
If you place a credit freeze, you will continue to have access to your free annual credit report. You also will be able to
buy your credit report and credit score even after placing a credit freeze. Companies that you do business with will still
have access to your credit reports; for example, your mortgage, credit card, or cell phone company, as would collection agencies
that are working for one of those companies. Companies will also still be able to offer you pre-screened credit offers.
Those are the credit offers you receive in the mail that you have not applied for. Additionally, in some states, potential
employers, insurance companies, landlords, and other non-creditors can still gain access to your credit report with a security
freeze in place.
Can I temporarily lift my credit freeze if I need to let someone check my credit report?
If you want to apply for a loan or credit card, or otherwise need to give someone access to your credit report and that person
is not covered by an exception to the credit freeze law, you would need to temporarily lift the credit freeze. You would
do that by using a PIN that each credit reporting agency would send when you placed the credit freeze.
In most states, you would have to pay a fee to lift the credit freeze. Most states give the credit reporting agencies approximately
three days to lift the credit freeze once you request it. This might keep you from getting instant credit, which may be something
to weigh when considering a credit freeze.
What does a credit freeze not do?
While a credit freeze can help keep an identity thief from opening most new accounts in your name, it is not a solution to
all types of identity theft. It will not protect you, for example, from an identity thief who uses your existing credit cards
or other accounts. There are also new accounts, such as telephone, wireless, and bank accounts, which an ID thief could
open without a credit check. In addition, some creditors might open an account without first getting your credit report.
And, if there is identity theft already going on when you place the credit freeze, the freeze itself won't be able to stop
it or fix it.
While a credit freeze may not protect you in these kinds of cases, it can protect you from the vast majority of identity theft
that involves opening a new line of credit.
Basic information about the North Carolina law:
Eligibility: All Consumers
Fees: No fees for identity theft victims with a valid report or complaint with a law enforcement agency. All others pay $10
to place the freeze, lift it temporarily, or remove it altogether.
Effective date of law: December 1, 2005
For a brochure from the North Carolina Attorney General's office:
Attorney General Roy Cooper Brochure
A sample letter to send to credit bureaus can be found here:
No Scam: NC Identity Theft Tool Kits
How do I Request a Fraud Alert be Placed on my Credit Report File?
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