But on September 21 the new law went into effect very quietly. This is the law about economic growth, facilitating the regulation and protection of the rights of consumers. This law allows consumers to independently manage their accounts, i.e. freeze and unfreeze access to their credit report.
The law means that any consumer can freeze a loan (also known as a security freeze) on their credit file. And this operation can be carried out as many times as they like. For free!
What does a credit freeze mean?
This means that no one can access your credit report including you. You will have a personal PIN code. Without it, you won’t be able to open a new account. This makes it much harder for thieves to open new accounts using stolen identities.
“A security freeze is an important anti-fraud tool against financial identity theft and data leakage. You can freeze and unfreeze your account as many times as you need to for free,” said Senator Mike Crapo (R.) Idaho.
“This is just one of several provisions of the law that will help protect (consumers) from identity theft and other circumstances that may harm their credit.”
However, there is another provision of the law. It allows consumers to put a “fraud alert” on their credit report. In this regard enterprises will verify the identity of the consumer before granting a new credit. The law extends the term of fraud prevention from 90 days to one year.
How does a credit freeze work?
The new law gives individuals greater control over the use of information in their credit report.
Typically, in the case of theft, thieves get your identity, which includes your name, date of birth, social security number and address.
With this information thieves can apply for all kinds of credit in your name…
Also, thieves can use this information to get a loan in your name (for example, mortgages, car loans). However, most information about you is used to apply for credit cards. After receiving the application the card companies look at your credit report. This allows you to analyze your payment history. And if everything looks good, they usually approve of a card in your name.
After that thieves use a new card to make purchases (most often online). By the time you find out what happened purchases can exceed thousands of dollars.
However, if your account has a blocked credit, credit card companies, like any other lending business won’t be able to access your credit report. Thus, the application for a new card will be denied.
Why you would unfreeze your account.
Consider the disadvantages of such protection. Do you want to borrow a mortgage, a car loan or, as mentioned, a new credit card? Note that potential lenders will be denied access to your credit report. In this case, your applications will be rejected.
This problem is easily resolved by “thawing” the credit freeze. The new law instructs the three major credit reporting agencies – Experian , Equifax and TransUnion – to create a page on their website. This page will allow consumers to request either a credit freeze or a fraud alert.
Consumers can lift the freeze their credit report by mail or phone. But the fastest method is to go online. The credit reporting agencies should cancel the freeze within one business day if the request is made online or over the phone. If the request is made by mail, the agencies have three business days to cancel the freeze.
But you should know consumers should contact each of the three reporting agencies separately to request a credit freeze or cancel a credit freeze.
If you have temporarily lifted the freeze so that lenders have access to your credit report, be sure to specify when you want the freeze to resume.
You can also request a freeze for your children. The children’s identities often are used by thieves to obtain loans and credit cards.