Last year, September 7, 2017 to be exact, consumers were told that their security, social security numbers, birthdates, names and addresses were hacked. This incident involved almost 147 million people. Leaving us all to feel vulnerable and confused how this could happen.
Beginning September 21, 2018, a new federal law will help consumers stop intruders from hacking their sensitive information. The three major bureaus, Equifax, TransUnion and Experian will be required to offer consumers a credit freeze, free of charge. This freeze will restrict access to your credit file and help stop crooks from opening credit cards/or having access to credit in your name.
Also starting September 21st parents will be able to get a freeze on their child’s account for all children under the age of 16. The child’s credit file would be frozen until the child is old enough to use credit. Children’s credit is one of the more lucrative targets for ID theft as they have clean credit. In some instances, the theft occurs when family members steal the child’s ID to apply for utilities/or electricity.
A University of Michigan doctoral student, Yixin Zou, was astonished to hear consumers disclose that they somehow associated a freeze with stopping the use of their credit cards or limiting their own access to existing credit cards. Where in fact under the new law, if a consumer asks for a freeze online or by phone, the credit reporting agency is required to put a freeze in place no later than the next business day, according to Federal Trade Commission blog. The consumer who signs up for a voluntary freeze is given a PIN – a PIN that you want to keep track of – to use when you want to unfreeze the credit file if you want to apply for new credit. If the consumer wants to unfreeze the credit file, the bureaus must make this happen within an hour.
Without this change in law consumers in several states paid a fee of around $10 for each freeze they placed on their credit files or $30 for putting a freeze with the three major bureaus. Then there could be a fee to unfreeze of $10 or so. . .Under the new law you can freeze and unfreeze your report at NO COST!
After the Equifax Breach, whether they were part of the breach or not, consumers could sign up to freeze their credit files if they made a move before July 1st. But now the new law offers freezes indefinitely.
Also, this new law – called the Economic Growth, Regulatory Relief and Consumer Protection Act – provides for those that have a guardianship, power of attorney, or conservatorship over an adult, you can get a free credit freeze for that person after providing proof of authority.
One thing to remember, bureaus sell all of our information to the highest bidder – they can’t give out your social security number but they can give your name, address, birthdate and what type of credit you have. A great rule of thumb, if you can do it, is to go to www.optoutprescreen.com which allows consumers to be removed from poaching companies for credit. It takes about 10 days to 2 weeks to go into effect and can be place for 5 years or for life. This way you get to choose who solicits you and who you want to apply for credit from. . .and it’s FREE.
If you do freeze your credit, be sure to unfreeze it before applying for new debt. This is very important. Not doing so will cost you money; the credit reporting agencies charge to pull your credit even if it is frozen. At Directors Mortgage we take protecting your identity, and your money, very seriously!
We look forward to being of service when you need mortgage services.
Please see below CIS Q&A on Credit Freeze
What is a credit freeze? A credit freeze stops the credit file from being released and prevents accounts from being opened without consumer approval.
What are the exceptions for releasing information with an active credit freeze? The credit bureaus reserve the right to release information on frozen credit files to existing creditors and collection agencies (on behalf of existing accounts) for account review and collection purposes. Information may also be released for pre-screening purposes defined by the Fair Credit Reporting Act. Consumers may opt-out of pre-screened offers.
How is a credit freeze activated & deactivated? The consumer must activate & deactivate a credit freeze with each bureau individually. The consumer chooses a temporary or permanent time-frame for the credit freeze. A PIN number or authorization code is provided that can be used to lift the freeze temporarily. Fees vary by state for activation &/or deactivation. Refer to the credit bureau websites for more information:
A new law effective Fall 2018 will eliminate credit freeze fees!
Credit freezes generally have waiting periods for activation & deactivation (lifts) to take effect. Lifts may be in effect for a short, defined time-frame. Refresh pulls are also impacted by credit freezes.
What is a credit lock? A credit lock is a service provided by each of the 3 credit bureaus individually. A credit lock stops the credit file from being released. The primary difference between a credit lock & credit freeze is instant control. With a credit lock, the consumer can instantly un-lock & re-lock their credit file using on line or smartphone access. Fees vary by credit bureau. Refer to the credit bureau websites for more information:
Credit freezes & locks are individual by person. Spouses must activate and deactivate services individually with each credit bureau.
What is credit monitoring? Credit monitoring delivers notification on credit changes, but does not stop the credit file from being released. Credit monitoring is provided by each credit bureau and by third-party services. It is important to note credit monitoring is most effective when done with all 3 credit bureaus to ensure notification of all credit inquiries, credit changes & credit pulls. Fees and services vary and must be researched with each individual service provider.
What is a fraud alert? A fraud alert informs creditors the consumer may have been a fraud victim and requires the consumer be contacted before making account changes, however information can still be released. There are different types of fraud alerts (initial, extended, active duty military). When a consumer initiates a fraud alert with one credit bureau, it will be shared with the other 2 credit bureaus.