Business There are more than eight million new victims of identity theft each year in the U.S. Many of these victims find that crooks have used stolen personal information like Social Security numbers to open new accounts in their victims name. A security freeze gives consumers the choice to freeze or lock access to their credit file against anyone trying to open a new account or to get new credit in their name. When a credit freeze is in place at all the three major credit bureaus (Equifax,Experian,TransUnion), an identity thief cannot open a new account because the potential creditor or seller of services will not be able to check the credit file. When the consumer is applying for credit, he can lift the freeze temporarily using a unique Personal Identification Number (PIN) so that only legitimate applications for credit or services can be processed Forty-seven states and the District of Columbia have enacted laws requiring the credit bureaus to enable consumers to protect their credit files with a security freeze. Acredit freeze, also known as acredit report freeze, acredit report lock down, acredit lock down, acredit lockor asecurity freeze, allows a consumer to control how a U.S. consumer reporting agency sells the collected data. The credit freeze locks the data at the consumer reporting agency until an individual gives permission for the release of the data. Credit freezes have been made possible by state laws as well as industry-initiated rules. Laws have been passed by nearly all the US states The first state to pass a credit freeze law was California, with a bill sponsored byDebra Bowenin 2003.In late 2007, all three of the major credit bureaus (following TransUnion’s lead) announced that they would let consumers freeze their credit reports, regardless of the state of residency.Though state laws still apply, if they are more favorable to the consumer with regarding the cost or other details of the freeze than they are under the industry sponsored alternative. Credit freezes are frequently viewed as the most effective way to prevent financial identity theft. Each year in the United States, approximately 15 percent of all cases of identity theft are cases of new account origination identity theft, according to the Federal Trade .mission (FTC). This form of identity theft occurs when a criminal opens credit in another individual’s name. In the credit origination process, access to a credit report is critical for a lender to make a risk assessment. A credit freeze effectively stops any access to the credit report and is a block in the process of issuing credit. Individuals who freeze their credit reports must therefore unfreeze their reports before they wish to apply for credit themselves. Lenders typically require access to the borrower’s credit report before issuing a loan in the borrower’s name. If lenders cannot see the borrower’s credit report, it is unlikely the lender will issue a loan in the borrower’s name. Hence, credit freezing should reduce the risk that loans or credit cards will be issued fraudulently. Credit freezes do have some disadvantages, however, such as creating potential difficulties or delays applying for a loan. To .pletely and thoroughly freeze access to one’s credit report, it is necessary to contact each of the three major credit reporting agencies. About the Author: 相关的主题文章: