To freeze credit the consumer must contact the three major credit-reporting agencies individually and request a security freeze, according to the Federal Trade Commission. Each agency asks for identifying information, and the consumer must pay a fee. The agency issues a PIN number that the consumer can use to lift the freeze.Continue Reading
With the security freeze in place, lenders and other companies offering credit-sensitive services are unable to obtain a copy of the consumer's credit report, according to TransUnion. If the consumer is applying for insurance, a home loan or new credit account, he contacts the reporting agency a few days in advance, supplies the PIN number, and asks the agency to lift the freeze for a certain period of time or a specific lender. If he fails to do this, the agency does not issue the report.
The security freeze does not end prescreened credit offers; however, it is possible through another process to opt out of these offers, according to the FTC. Another option, for individuals who believe they are the victim of identity theft, is the fraud alert. The alert continues to allow lending institutions to receive a copy of the credit report but requires the institutions to take steps to confirm the consumer's identity. Fraud alerts also stop others from opening new accounts; however, with the fraud alert, the consumer must continue monitoring existing accounts to prevent changes by an identity thief.Learn more about Credit & Lending