Do you know who is most likely to steal your identity and put negative items on your credit history? I’ll give you a hint. It’s not a ‘prince’ in some foreign land. It’s not even some guy named ‘Dave’ in a country that spans both Europe and Asia. It’s not some pasty white hacker sitting at a computer in their basement wearing a black hoodie. No, it’s not any of those creepy crawlers out there.
- Who knows all of our information?
- Who do we invite into our homes and give access to all of our information?
- When it does happen, a police report is needed to clean up the identity theft. Who are we least likely to file a police report on?
That’s right, it’s FAMILY!
So how do you stop it? Well, some people have resorted to freezing their credit. While a few of those have literally frozen their credit cards in a block of ice (true story, but actually for reasons other than identity theft), most of those using a freeze have contacted the credit bureaus and basically shut off their credit reports to any company trying to open a new line of credit in their name. For those lenders requiring a credit report to open a line of credit, it’s a guaranteed denial. For those lenders who might work around issues on the credit report, a freeze is a big red flag saying “DON’T GO THERE”.
Up until now, those credit freezes have cost money unless you have a police report proving identity theft. It wasn’t a big deal here in South Dakota – $10 for each of the bureaus to apply the freeze and $10 for each of the bureaus to lift the freeze (unless you were willing to wait 7 years at which point it fell off automatically). $10 isn’t bad, but if you are looking at applying and then lifting a freeze on all three bureaus, that comes out to $60.
And so the government has spoken and amended the Fair Credit Reporting act. This really is big news. Here’s what it gives Americans:
- Free credit freezes AND freeze lifts for anyone.
- Freezes can be permanent unless the individual lifts the freeze themselves with a special PIN number.
- If done by phone or internet, freezes must be placed within one day and lifted within one hour.
But what does this mean for me?
While those already dealing with identity theft have a good chance of using credit freezes, I think the bigger impact will be for those who have not yet dealt with identity theft. This new regulation opens up credit freezes as a tool for proactive credit and identity management.
Know you aren’t going to be applying for credit anytime soon? Put a free freeze on it with a few clicks of the mouse.
Decide that you really do want that new credit card? A few more clicks and you have your credit back open long enough to get approved and then back into the freezer it goes.
While this is all fine and dandy if not better, it’s not some magic potion that Professor Snape might whip up to magically shield against any and all identity theft (gratuitous Harry Potter reference). There are still ways for people to use your identity and even your existing credit. You still have to remain vigilant.
I think this new regulation will, rather, more readily provide another tool in fight against fraud – one tool among, hopefully, at least a few you should be wielding regularly.
Curious how your credit report impacts your credit score? Want to know more about how to build your credit history and score towards achieving your bigger goals? The counselors at the Center for Financial Resources can help with that. In a credit report consultation, we’ll look at where you stand, where you want to be, and help you establish a plan to get there. All you need to do is call us at 605-330-2700 or go online to schedule an appointment.
written by Breck Miller
Harrry Potter image courtesy CBSnew.com