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Identity theft and fraud victims quickly learn that, by law, they can request a fraud alert be placed on their credit report to monitor activity. This 90-day alert requires each of the three credit reporting agencies to closely track your account and notify you of any new or suspicious activity.
However, more than 30 individual states have adopted credit freeze laws. A credit freeze does more than just require monitoring of account activity – it prevents anyone from reviewing your credit report. Access to your credit report and credit scores is locked and you are the only one with the authority to release information using a predetermined PIN to unlock access to your credit file.
Lenders, retailers, utilities and other businesses need access to a credit report to review and approve new credit, loans and services. With a freeze on your credit report, it doesn't matter how much personal information an identity thief has in his or her possession, without access to your credit report, he or she cannot get new loans, credit, or accounts in your name.
In some states, a security freeze on credit reports is only available to proven victims and it is typically free of charge. In other states, the option is also available to non-victims for a fee. For example, in Minnesota, the fee to place, remove, temporarily suspend, lift for a specific creditor, or have a PIN reissued is $5. While it may be a bit of a nuisance to use a PIN every time you want to apply for a new credit card, home or car loan, the protection that a security freeze provides is invaluable.