Credit Freeze Part#1

Brief explanation so were all on the same page.

When you barrow money for different items in your life time that information goes into a report. Information from this report is used to compile your credit score, which is a numerical value grading how much the credit industry likes you.

So if your credit report shows that you have a history of paying back the money that was loaded to you by organizations that report to the credit bureaus your score will be higher.
If you have a history of filing for bankruptcy & not paying back the money loaned to you by these organizations that report to the credit bureaus then your lower score.
If you have never borrowed money from a bank or credit card company that feeds into this database then you won’t have a credit score.

The better better your credit score the more likely lenders are to give you more favorable terms when lending you money. This might take the form of lower interest rates or not asking for a cosigner to the loan. So quick summary you want to have a high number and a good credit report. It will make your life easier.

This was just meant as a brief explanation of the subject matter so we’re all on the same page.

But you came here to learn about how to protect yourself from crime, not economics 101. Don’t worry we will get there I just need to spend a little more time connecting the dots. So we now know that a good number in our credit report can help us barrow money in the future more easily. But how does this relate to crime? The issue is that your whole identity and credit history can be boiled down to just a few important numbers that are used to identity you and defiant you from someone else. These numbers must be given out to certain businesses and people, which makes them vulnerable. Once they have these numbers they can purchase just about anything. I think you can see where this is going. Criminals like expensive things or they like selling expensive things to finance their lifestyles so they don’t have to work very hard. Well if they buy things using their information that would mean they would be stuck paying it off. So they prefer to use your information. That way you’re stuck paying back the money or getting the negative mark on your credit report.

Example in the real world.

I once went to a nice doctors office in a fancy part of Orange County. All the cars in the parking lot were super expensive models that I had only seen in magizines before now. We were right next to a marina that was full of fancy yatchs. The point of the story is this was a very rich area and we felt very safe. When we were filling out our new patient paperwork they wanted my social security number to use as my patient number. It goes without saying this but you shouldn’t ever do this. If you complain most doctors offices will assign you a random patient number. Well when the docotors office asked us to fill out the form on the line asking for the social security number we eventually gave in and put down the number. Anywas the doctor did his thing and I got the needed medical help. Everything went great and I went home. Years later the doctor I visited fired the front counter staff. On their last day this person copied off the medical files of many past patients, including myself. I had no idea any of this had happened. This ex employee than took the paperwork to a local gang they knew. They were going to sell all that patient information to the gang so they could use it to comet identity theft. I had no idea any of this was happening. Lucky the gangs safe house was raided by the police and the nicely dressed bussiness women was arrested that day right long side all the carrerr criminals. My father later got a call from the long beach sherrifs office informing us that my info was found at the crime scene. My father than called me and it was through him that I found out about this issue.

What can be done to stop of minimize this problem?

(1). Minimize The Number Of Times You Give Out Your Important Numbers.

Minimizing your chances that criminals will get ahold of your important information is always a great place to start. Some places might ask for your social security number or other vital number as a default setting to make their life easier. But if you ask them and maybe even be honest and tell them you’re concerned about identify theft. They will most likely be accommodating and say that they don’t need the number or that they can assign you a different number. I should have asked my Doctor to assign me a random number instead of giving them my social security number. There are some places that still require you to give them your social security number. Some good examples of places like this are your bank and your employer. But at least you have minimized the number of possible leaks you could be dealing with in the future.

(2). Review Your Credit Report Once a Year.

There are three companies inside the USA that each have a file and write up a credit report on you and assign you a credit report. Under US law you are able to get a copy of your credit report from them once a year. We recommend contacting them once a year on your birthday or another easy to remember date and reviewing your credit report. This is great for catching issues after they have taken place, but is there any preventive work that can be done? Besides catching criminals it can also be a great way of catching honest mistakes that companies have made during the normal course of business.

(3). Freeze Your Credit Report.

Under US law people are allowed to contact these credit reporting bureaus and tell them to Freeze their credit reports. This service comes with legal protections and must be offered to everyone free of charge. But what does this mean and how can it help people protect themselves from becoming a victim of identity theft? It tells the Credit Reporting Bureaus that you won’t be needing any new forms of credit any time soon. You are still able to use all the already approved lines of credit, but no new requests for information will be processed. Just imagine the credit reporting bureaus putting your credit reporting file in a deep freezer in the back room. Criminals like starting new lines of credit for you because it’s harder for you to find out about them. If a criminal gets ahold of your important information and applies for credit in your name the company that is approving the loan will request your credit report. The Credit Reporting Bureaus won’t give them your credit file because its frozen. Therefor the company considering the new loan won’t approve it. Therefor the criminal won’t get their fancy new toy and your day wont be ruined. This is great, but there is a few downsides. If you need to apply for credit then this is something that must be planned out ahead of time. Because it will take you at least a few days to unfreeze your credit reports. Some agencies allow you to temporally unfreeze your account for a specify time period or allow one company to inquire about your credit. Unfortunately some companies might require that you call back their office to double check that it is you. I recommend that you review your credit history before you call the agency up. They are going to ask you random questions about your credit history to verify it is you. Such as companies that you have had credit cards with or addresses you have had PG&E accounts at. I had my personal credit report locked and it took me about an afternoon to unlock it so I could get approved for a new line of credit. So you just have to plan out how you use credit a little bit more. Which isn’t always a bad thing. It goes without saying but I would recommend that you get at least one credit card with some nice card benefits. Because you want to lock your report and keep it locked. Only opening it up every few years for important purchases like a house or a new car. You don’t want to constantly be closing and opening your credit report. The upside to locking your credit is that you will stop getting as many pre approved credit cards in the mail. If you’re a person who struggles with constantly signing up for every store credit card you cross paths with this might be a positive restraint for you. The credit reporting bureaus are also a great place to shop for credit cards that might offer better terms than the ones your getting in the junk mail everyday.

(4). Lock Your Credit Report.

These Credit Bureaus offer a service that is called a Credit Lock. Just like a lock this allows you to open up your credit bureaus report use it and then re-lock it after your done. The different credit bureaus will charge you a fee for this service. Credit locks do not come with any legal protection, unlike credit freezes. But if you’re the type of person that is constantly applying for new credit cards or car loans I would recommend this service for you. It defiantly will give you more protection than walking around with an open regular credit report.

Our Recomendation

Identity theft is a growing issue around the world. This is why we chose to do it as one of our first articles on our new website. I would recommend that you get a copy of your credit report every year on your birthday. Most people only find out that their identity has been stolen when it is years later and they get turned down for a job or they are turned dow for a loan. Be proactive, it will save you allot of time and embarrassment in the future. Overall learning to mastering the double edge sword that is the modern credit service industry is an important part of becoming an adult.

A decent amount of credit cards now come with a credit monitoring service option or a way of getting a copy of your credit report through them. If this looks like something that would help you to better monitor your credit history than you should sign up for it.

When it comes to Credit Freezes and Credit Locks, I would honestly look at your life and decide which is more useful to you. Credit Freezes are great, they provide you legal protection, they can be set and left for years, and best of all they are free. I recently froze my persoal account, unfroze it to buy a house and then refroze the account without issue. I really enjoyed the fact that certain of the bureaus allowed me to open it up just for my morgage company or for a set amount of time. The down side was that after it was locked my wife decided we needed solar on the new house. We met with several solar brokers, but when we found one that we liked I couldn’t fill out the paperwork that afternoon. So I had to unfreeze my credit and go back into their offices again to sign the paperwork. If your the kind of person who is younger or maybe for whatever reason has frequent suprises in their life that require you to sign up for new forms of credit, a credit lock might be a better option for you. Again I’m not judging, were all adults here, I’m just explaning your options. If the tire popped on your car on your way home from work today and you needed to sign up for a 0% credit card through the tire shop to get to work the next day. A credit lock could be quickly unlocked and relocked. The credit freeze would take you additional time, that might be incovient for you. The credit lock does cost you a fee, I’m not going to quote you an amount here in this article because it can change & I don’t want to give you outdated info. So sign up for whatever service works best for you.

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Credit Freeze Part 2