A credit freeze , also known as freezing credit report , credit report key down , credit key down , credit key or security freeze , allowing individuals to control how US consumer reporting agencies (also known as credit bureaus: Equifax, Experian, TransUnion, Innovis) are able to sell their data. A credit freeze locks the data in a consumer reporting agent until an individual grants permission to release data. Today, credit freezing is made possible by state laws as well as industry-initiated rules. The law has been endorsed by almost all US states (see partial list below). The first country to issue a credit freeze law was California, with SB 1386 sponsored by Debra Bowen in 2003. At the end of 2007, the three major credit bureaus (after TransUnion leaders) announced that they would let consumers freeze their credit report, regardless of the country of residence. However, state legislation is still in force, in which case the fees or other details of the hold are more favorable than under an industry sponsored alternative.
Credit freezing is often seen as the most effective way to prevent financial identity theft. Every year in the United States, about 15 percent of all identity theft cases are cases of identity theft of new account origination, according to the Federal Trade Commission. This form of identity theft occurs when a criminal opens a credit on behalf of another person. In the credit origination process, access to credit reports is very important for lenders to make risk assessments. Because credit freezing effectively stops access to credit reports, it places the bloc in the lending process. Individuals who freeze their credit reports should therefore dilute their reports before they wish to apply for their own credit.
Lenders usually require access to the borrower's credit report before issuing the loan on behalf of the borrower. If the lender can not see the borrower's credit report, it is unlikely the creditor will issue the loan on behalf of the borrower. Therefore, credit freezing should reduce the risk that a loan or credit card will be issued fraudulently. The freezing of credit does have some disadvantages, however, such as creating potential difficulties or delay applying for a loan.
To completely freeze access to a person's credit report, you need to contact each of the three major credit reporting agencies. The related costs also differ from state to state. In states where legislation does not dictate more favorable rates, the cost of freezing credit reports is $ 10.00 and incompatibility is equal to $ 10.00. In some countries, the cost of freezing credit is waived for identity theft victims. To avoid credit freezing charges, law enforcement or complaints reports are generally required with other documentation. Experian has a web page where a Police ID Theft report or other document can be uploaded. However, the mechanism may be difficult to use because it only accepts two formats: PDF and TIFF 6.0 specifications from 1992. At the end of 2007, credit bureaus began introducing the capability of online credit freezing, to their credit monitoring service customers. Here are the direct links to freeze your credit in each bureau: Equifax, Experian, and TransUnion.
The federal laws envisaged by the House of Representatives and the Senate may precede state law and provide a national standard. This law is generally supported by consumer advocacy organizations and is opposed by financial services companies. The bill included HR 3997, although the bill was suspended in 2006.
Video Credit freeze
US. declare without credit freezing law
On May 16, 2012, forty nine states and the District of Columbia have credit freezing laws. The last country without law freezing compulsory credit is Michigan.
Maps Credit freeze
PIN Weakness
Lifting a credit freeze requires a PIN. However, in September 2017, security vulnerabilities in this system were identified: PINs in many cases are predictable, and it is difficult or impossible to reset.
References
- Identity Theft FTC Theft Victims January 1 to December 31, 2005, Federal Trade Commission, Washington, DC, USA, Pg. 6 Figure 5, "How Victim Information is Abused."
External links
- Is your credit freeze a path to protect your ID ?, USA Today , June 19, 2006
- Freedom of State Security Act, ConsumerUnion.org
- Credit Closure Surveys The majority of Americans are unaware of their ability to freeze their credit records, November 2007
- Map of the Law on Freedom of State Security Act, LawServer.com
- Equifax Credit Unrest Link
- Transunion Credit Closure Link
- Experiment Credit Closing Link
- Innovis Credit Removal Link
Source of the article : Wikipedia
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