Suspect Identity Theft? You Can "Freeze" Your Credit Reports

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Today, with data breaches, telephone scams, and bogus links in emails and texts with offers or warnings that seem legitimate but are, in reality, part of click-bait cons, identity theft is rampant.  And a major consequence of identity theft can be the opening of credit cards and other loans in your name without your knowledge and consent.  How can you prevent an identity thief from opening an account in your name? Well, if you know or suspect that you are an identity theft victim, you may want to consider placing a security freeze on your credit reports with Equifax, Experian, Innovis, and TransUnion (and other consumer reporting agencies, a/k/a credit bureaus or CRAs).  

Under the Fair Credit Reporting Act (FCRA), you are entitled to have credit bureaus place a security freeze on your credit reports

When you place a “security freeze” pursuant to the FCRA on your Equifax, Experian, Innovis, or TransUnion credit report (or your credit report with any other credit bureau), the consumer reporting agency cannot release information from your credit report without first obtaining express permission from you.  Because a security freeze prevents a consumer reporting agency from releasing credit information about you on consumer reports, it is nearly impossible for an identity thief to open any type of credit account in your name without your knowledge.  Why? Because very few legitimate creditors will extend credit without first making a hard inquiry (a request for a consumer report) about you. 

Is there a downside to placing a security freeze on your credit reports?

In a word, yes. When you place a security freeze on your credit reports, consumer reporting agencies require sometimes time-consuming verifications to prove that it is really you that is making an application for credit.  That process works very well to prevent victims of identity theft from having unauthorized accounts opened.  But those same security measures mean that a  security freeze can delay or sometimes even prevent timely approval of a legitimate credit application. For example, you may try to get pre-approved for a mortgage so you can make an offer on a home only to find that the delay caused by a security freeze allows someone else to make a qualified offer on the home before you jump through the hoops necessary to get approved when a security freeze is in place.  

While a security freeze is your best protection against identity theft, the Fair Credit Reporting Act also allows you to put a somewhat less restrictive “fraud alert” on your credit reports. When there is a fraud alert on your credit file, lenders must take heightened steps to verify your identity before extending credit. Because a fraud alert is less restrictive than a credit freeze, it generally causes fewer (or at least shorter) delays in the processing of credit applications.  

Fraud alerts come in two varieties. There is an initial fraud alert, which places a one-year alert on your credit reports. There is also an extended fraud alert available to victims of identity theft.  An extended fraud alert lasts for seven years. While both credit freezes and fraud alerts often slow down your ability to access credit, good planning on your part can do much to alleviate that problem. And the alternative -- having fraudulent accounts opened by an identity thief -- is an issue no one wants to confront.

Sherman & Ticchio Is Here for You

At Sherman & Ticchio, we focus on your individual needs to help you correct errors on your credit reports or background check reports. We are here to listen to you and help you navigate the legal system.

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Sherman & Ticchio is committed to helping you address your credit reporting and background check reporting issues in New York.

We offer a free consultation and we’ll gladly discuss your case with you at your convenience. Contact us today to schedule an appointment.

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