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Better Securing Your Credit

More and more people are becoming victims of identity theft.  This disturbing fact has encouraged some individuals to think outside the box when devising strategies to safeguard their finances.

One relatively easy way to make it more difficult for fraudsters to gain access to your identity is to freeze your credit report.  Here are a few details regarding this option.

Positives

Once you lock down your credit, you will be issued a PIN.  It’s important to store the number in a safe place you will remember.  The PIN allows you to have right of entry to your financial information.  Therefore, you can continue to monitor your credit report even during a freeze.

Many businesses will not open a line of credit without first contacting the credit bureau to check an applicant’s monetary background.  In the event a hacker has obtained pertinent data like your social security number, address, phone number, and attempts to use the info to open credit in your name, your report will be blocked.

You can implement a credit freeze and temporarily lift it if you decide to apply for a credit card, car loan, mortgage, etc., or if you want another party, like a new employer or potential landlord, to view your credit report.  In short, you have the flexibility to lock and reopen as you choose.

And perceived negatives?

There are three credit-reporting companies: Equifax, Experian, and TransUnion.  All three should be notified when freezing credit.  Naturally, you will need to supply personal information to the respective parties.  Individual states have their own filing guidelines and fees concerning lock down and lifting: the fee per occurrence in Massachusetts is $5.

You cannot spontaneously open a new line of credit.  For instance, if you’re in a department store and obtaining a line of credit from the respective establishment means you’ll get 15% off the merchandise in your cart, you must first unfreeze your credit through the U.S. Consumer Reporting Agency (a.k.a., credit bureau) or it’s unlikely the application will go through.  Unfreezing can take a few days.

Existing credit accounts are usually unaffected by security freezes.  Subsequently, if a deceitful individual acquired your private data and tries to put through transactions on an open account, the attempts might be successful.  Because of this, it’s extremely important to continually monitor all credit lines to better prevent fraud.

Regrettably, identity theft is increasing, but consumers are not without protective opportunities.  For further information regarding this topic, go to www.consumer.ftc.gov.

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