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Understanding Identity Theft: What It Is and How to Prevent It

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Identity theft is a real and growing problem. In 2022, the FTC received over 1.1 million reports of identity theft, with losses rising 30% from 2021.

These staggering numbers send a clear message— everyone must understand identity theft and how to protect themselves from becoming victims.

From spotting the scam, dealing with debt, and stopping the problem before it stops, read on to learn all there is to know about identity theft.

Definition of Identity Theft

Identity theft occurs when an individual illicitly obtains and uses someone else’s personally sensitive information. This data may include the victim’s full name, Social Security number, credit card details, or other crucial financial information.

The primary motive behind such an act is typically fraudulent, intending to deceive or mislead for the thief’s monetary gain. The aftermath of identity theft is far-reaching, adversely affecting the victim’s credit, finances, and personal reputation.

Identity Theft

Different Types of Identity Theft

It’s unfortunate, but identity theft has become so broad and lucrative that there now exists a vast spectrum of identity theft, each type possessing its unique characteristics and potential impacts. We hope you take away that identity theft isn’t limited to stealing someone’s credit card information. Theft goes beyond just stealing your credit card, ranging from financial and medical identity theft to criminal and child identity theft.

As you’ll see, it’s not only smart to be careful with your own personal information but also to be mindful for your children and aging parents, too.

Financial Identity Theft

Financial identity theft is what most of us think of when the topic comes up. It refers to the unauthorized use of another person’s financial information for personal gain. This could involve the theft of credit card details, bank account information, or other forms of financial data. As a result, the victim may suffer significant financial loss and damage to their credit score.

Medical Identity Theft

In medical identity theft, the thief uses stolen personal information to obtain prescriptions, medical services or goods or to make fraudulent claims to insurance providers. This can have severe implications for the victim, including incorrect medical records, declined prescription fill-ups, and substantial financial liabilities.

Child Identity Theft

Child identity theft occurs when someone uses a child’s Social Security number to commit fraud. Since many children don’t use their Social Security numbers until they become adults, the theft can go undetected for years, leading to a myriad of financial and legal issues.

Synthetic Identity Theft

In synthetic identity theft, the thief creates a new identity using a combination of real and fabricated information, for instance, mixing a valid Social Security number with a fake name. It’s one of the fastest-growing types of identity theft and is often harder to detect as it doesn’t directly involve an individual victim but rather fictitious entities.

Senior Identity Theft

Senior identity theft targets older adults, who are often more susceptible due to a lack of knowledge about the internet or less frequent monitoring of their financial accounts. It can range from stealing retirement benefits to Medicare fraud and beyond.

National Legal Center has a dedicated division focused on helping seniors and individuals living with disabilities who are dealing with troublesome debt. Call 1-800-728-5285 or request a free consultation online today!

Identity Theft

Impact of Identity Theft

Identity theft isn’t just about financial loss. It can have a long-lasting effect on victims, who may be forced to undergo credit repair and spend countless hours contacting lenders and restoring their good name. Furthermore, victims of identity theft are also prone to feeling violated and exposed, as they may never know who was behind the theft or why they were targeted.

How Does Identity Theft Happen?

Identity thieves use a variety of tactics to obtain personal information, ranging from dumpster diving to sophisticated phishing scams. Let’s go over some common methods of identity theft.

Obtaining Personal Information from Public Records or Online Sources

Personal information can be found in public records, such as birth certificates or marriage licenses, or online through social media accounts, websites, and forums. Some of this we have no control over, but some we do. We can all do well to remember that what we put online stays online, so it’s essential to be mindful of what information we post online and who we share it with.

Dumpster Diving and Mailbox Fishing

Thieves often go through trash or look for mail containing financial or personal information. To avoid becoming a victim, shred documents that contain any sensitive information before disposing of them. Consider having packages delivered to your work address or picking them up from the post office.

Phishing Scams

Phishing scams look to obtain personal information by sending fake emails or messages that appear to come from legitimate sources. Be wary of email links and attachments, as they could be malicious and a gateway for identity thieves to access your data.

Skimming

This method involves using a small device installed on an ATM, gas pump, or other card reader. When you insert your card for payment, your credit card information is recorded for the thief to retrieve later. Always be aware of your surroundings when using an ATM, and if something looks strange or suspicious, it’s best to leave and use another machine.

Phone Scams

Phone scams involve the use of deception to obtain someone’s personal information. For example, a thief may call pretending to be from your bank or credit card company and ask for your account details. Another popular scam targets seniors, acting as a grandchild in an accident or jail needing money to solve an immediate crisis. Don’t provide any information over the phone unless you know who you’re talking to and why they need it.

Worried girl having payment problems

How To Prevent Identity Theft

Protecting yourself from identity theft requires a combination of vigilance, smart habits, and the right tools to safeguard your data.

Freeze your Credit

One of the best ways to protect yourself is by placing a credit freeze with the three major credit bureaus: TransUnion, Experian, and Equifax. Placing a credit freeze prevents anyone from accessing your credit report without your explicit permission, effectively blocking any new loans or accounts in your name. A free credit freeze tends to be more robust and effective than a credit lock or fraud alert.

Use Strong Passwords and Don’t Reuse Them

Always use strong passwords that feature uppercase letters, lowercase letters, numbers, and special characters. Also, it’s best practice not to reuse passwords, as this makes it much easier for a hacker to enter your accounts. Consider using a password manager app to store all of your passwords securely.

Be Aware of their Tactics

As mentioned above, identity thieves use tactics such as phishing scams and phone scams to obtain personal information. Don’t click on links or open attachments from unknown senders, and be wary of any requests for personal information.

Monitor Your Accounts

Check your accounts regularly to ensure there are no suspicious transactions or other signs of identity theft. If you see something unusual, contact your bank immediately to take appropriate action.

Credit Monitoring and Identity Theft Protection

Credit monitoring and identity theft protection services can help you stay on top of the latest breaches, alerting you to suspicious activity in your accounts. Additionally, credit locks are available if you feel uncomfortable with a credit freeze. A credit lock is not usually free, but it is more flexible than a credit freeze as you won’t need to lift a credit freeze when applying for new services.

For a more in-depth analysis of how to protect your credit information from theft, refer to our articles on “how to freeze your credit,” “credit lock vs. credit freeze,” and “fraud alert vs. credit freeze.”

Taking these preventative measures can help you protect your credit and financial security from identity thieves.

Summing it Up

When it comes to protecting yourself from identity theft, knowledge is power. By understanding how identity theft works and taking the proper steps to safeguard your sensitive information, you can keep your data safe while still enjoying the conveniences of modern life.

If identity theft or other hardship has left you with unaffordable debt, we can help! Our law firm has helped thousands overcome unmanageable debt and regain financial freedom. Contact us today for a free consultation and learn how we can help you break free from debt.

Schedule a Free Debt Consultation with National Legal Center

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A woman sitting in a café is using her credit card to make online purchases.

Fraud Alert vs. Credit Freeze: Which One is Right for You?

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Given the growing risk of identity theft, it’s crucial to take precautions to safeguard yourself against scammers. Two potential solutions are fraud alerts and credit freezes. Although the terms may appear alike, there are a few important distinctions to consider when deciding which identity theft prevention method is right for you.

In this piece, we’ll delve into the definitions of fraud alerts and credit freezes, their benefits and drawbacks, and how to determine which one suits your circumstances.

What is a Fraud Alert?

A fraud alert is a warning message that you can place on your credit report if you suspect or have confirmed, that you are a victim of identity theft. Credit reporting agencies, such as Experian, TransUnion, and Equifax, receive and store information about your credit history, including your credit applications, loans, payment history, and collections.

You only need to place a fraud alert with one credit bureau. They notify the others to ensure you have all three credit bureaus place an alert on your credit reports. Once they place the remark on your credit reports, any lender that views your credit file knows to take extra precautions to be taken when processing any credit application in your name.

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Fraud Alert: A Detailed Look

A fraud alert acts as a cautionary flag on your credit report when you suspect or have been a victim of identity theft. You alert credit reporting agencies like Experian, TransUnion, and Equifax, who then require lenders to exercise additional care when handling any credit application under your name.

Key Features of a Fraud Alert

  • Cost-effective: Placing a fraud alert on your credit is completely free.
  • Ease of Setup: You only need to notify one credit bureau; they will convey the message to the others. All three credit bureaus work together to have the alert placed on your credit file.
  • Duration: A fraud alert lasts for one year without evidence like a police report; having supporting evidence (like a police report or letter from a creditor) allows for an extended fraud alert lasting 7 years.

Limitations of a Fraud Alert

  • Not foolproof: An alert does not prevent identity thieves from trying. Lenders might not reject fraudulent requests, granting credit to fraudsters and leaving you to deal with bad debt.
  • Not comprehensive: A fraud alert is not as effective as a credit freeze in certain cases. We’ll discuss this more in the next section.
  • Short timeframe: Without evidence, the initial fraud alert lasts only one year. An extended fraud alert lasts much longer, but scammers don’t always leave a trail.
Creditor Call

When to Place a Fraud Alert on Your Credit Report

A fraud alert is placed when you have become, or believe you may become, the victim of identity theft.

Place a Fraud Alert for Potential Identity Theft

Let’s consider a scenario where you receive an email that appears to originate from your bank, alleging suspicious activity on your account and asking for immediate verification of personal information.

Alarmed by their message, you quickly follow the provided link and enter your private credentials. Two minutes later, you realize what happened and suspect the email might have been a phishing scheme.

Alarmed about the potential for fraudulent activity on your credit, this is the perfect time to contact the credit reporting agencies to place a fraud alert that lasts up to one year.

There’s no confirmation of fraudulent activity in this situation yet, but you place a fraud alert to implement preventative measures.

Place an Extended Fraud Alert for Known Fraud

Consider this second scenario. A month ago, you lost your wallet containing your social security card, credit cards, and other personal identification documents. Since then, you’ve been vigilant, frequently checking your credit reports and bank statements for any suspicious activity.

One day, you notice unfamiliar transactions on your credit card statement. You’re certain you haven’t made these purchases, and alarm bells start ringing. You contact your bank, who confirms that your credit card has been used fraudulently.

You immediately report the crime to the police and obtain an official police report, providing concrete evidence of fraud.

With the police report in hand, you contact the credit reporting agencies. This time, you can place an extended fraud alert. The police report allows you to extend the duration of the fraud alert from one year to seven years, providing you with long-term protection against additional bad debt and fraudulent activities on your credit report.

A Credit Freeze: Digging Deeper

A credit freeze, or a security freeze, serves as a robust shield for your credit information against fraudulent activities. It halts any access to your credit report, therefore, any lender trying to view it will be unable to do so unless you provide the go-ahead by unfreezing it. This is achieved using a unique Personal Identification Number (PIN) that you receive when you first place the initial freeze.

Advantages of a Credit Freeze

  1. Robust Protection: A credit freeze offers stronger protection compared to a fraud alert as it completely restricts access to your credit report.
  2. Control in Your Hands: You hold the power to allow or deny access to your credit report, providing you the ultimate control.
  3. Unique PIN: A special PIN is provided when you activate a freeze, which is required when you wish to lift the freeze.
  4. Proactive protection: Credit freezes are a proactive way of ensuring that your credit report remains secure.

Disadvantages of a Credit Freeze

  1. Requires Effort: Unlike a fraud alert, you need to contact each credit bureau individually to place a freeze.
  2. Potential Delays: Unfreezing your credit report when needed can cause delays in credit application approvals.
  3. Dangerously Strict Identity Protection: If you lose your PIN or can’t answer the security questions, expect a tedious process to unfreeze your credit report.

When to Place a Credit Freeze

The best time to stop a problem is before it begins.

Placing a freeze on your credit prevents any fraudster from accessing it and using it to their benefit. A credit freeze offers more comprehensive protection than a fraud alert, as it prevents the credit from being accessed in the first place.

Place a Credit Freeze for Proactive Protection

You can place a credit freeze even if you don’t suspect any fraud or suspicious activity. Let’s say you’ve been a great money manager over the years; you’ve built up excellent credit, making you an attractive target for identity thieves. While you haven’t detected any suspicious activities, you understand the potential risk.

You decide to be proactive in protecting your financial health and reputation. You understand that a credit freeze can prevent unauthorized parties from accessing your credit report and opening new credit accounts in your name, effectively making it more difficult for identity thieves to exploit your good credit and harm your FICO score.

You contact each of the three major credit bureaus to place a credit freeze on your accounts. It may require a bit more effort, but you believe the enhanced protection is worth it. You securely store the unique PINs provided by each bureau, knowing they’re the keys to lifting the freeze should you need to apply for credit in the future.

By placing a credit freeze proactively, you take control of who has access to your credit report, thereby significantly reducing the chance of becoming a victim of identity theft.

Place a Credit Freeze After Identity Theft

Although a credit freeze is done as a preventative measure, anyone who has had to recover from a stolen identity knows they don’t want to go through it again.

Let’s go back to the unfortunate situation where you’ve had your wallet stolen. After gathering evidence of identity theft and filing a police report, you contact the credit bureaus and place an extended fraud alert to last seven years. On top of that, you immediately place a credit freeze with each credit bureau.

By doing both, you take advantage of the fraud alert’s heightened monitoring and the freeze’s strong protection. Armed with more than one layer of defense, you’re taking meaningful steps and your identity is much safer from being compromised again in the future.

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Fraud Alert vs. Credit Freeze: Which option is right for you?

Fraud alerts and credit freezes are both useful tools in combating identity theft. Still, which one you should choose depends on your unique circumstances.

If you’ve been the victim of fraud, placing a fraud alert is a good first step to take. It will notify lenders to be cautious when processing credit applications in your name and give you some peace of mind.

If you have never had issues with someone taking out credit in your name or otherwise gaining access to your credit record, a fraud alert likely won’t make sense.

If, on the other hand, you want to prevent any unauthorized access to your credit report, a credit freeze is a more comprehensive option. It will completely restrict access to your credit report, providing you with more thorough protection.

Conclusion

Fraud alerts and credit freezes are valuable tools for protecting your finances and your identity. They have their advantages and disadvantages, and whether you choose one or the other depends on your situation. Consider the cost, convenience, and level of protection you need before deciding.

Protecting your credit is an essential step to safeguard your finances, so don’t wait until it’s too late!

Frequently Asked Questions

What does it mean to verify your identity with credit reporting agencies?

Verifying your identity with credit reporting agencies is a process that ensures your personal information is correctly associated with your credit history. This is often required when you request credit reports, place a freeze or alert on your credit, or dispute information on your credit report.

How can I protect myself from identity thieves?

One of the most robust protections against identity thieves is a credit freeze. A credit freeze restricts access to your credit report, halting any potential fraudulent attempts to open new credit accounts in your name. Fraud alerts also play a role by requiring creditors to verify your identity before extending credit.

How can active duty service members protect their credit?

Active duty service members can use tools like credit freezes and fraud alerts for protection. Additionally, they are entitled to free credit monitoring and can access their free credit reports more frequently than the general public.

Can I place a credit freeze online?

Yes. A credit freeze can be placed online with each of the three major credit bureaus. Remember, you need to contact each credit bureau separately to place a freeze.

What is an identity theft report?

An identity theft report or affidavid is an official statement that documents the evidence of identity theft. Filing this report with the credit bureaus can enable the placement of an extended fraud alert and aid in the removal of fraudulent information from your credit history.

How many free credit reports am I entitled to each year?

As a consumer, you’re entitled to one free credit report annually from each of the major credit bureaus. However, under certain circumstances like being a victim of identity theft or being on active duty service, you may be eligible for two free credit reports per year.

What’s the difference between a free credit report and free credit monitoring?

A free credit report is a snapshot of your credit history at a point in time, while free credit monitoring is a service that continuously tracks changes to your credit file and alerts you to any suspicious activities.

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Credit lock

Credit Lock vs. Credit Freeze: What’s the Difference?

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Your credit report is a treasure trove of information – if it falls into the wrong hands, it could lead to havoc. 

Given the potential chaos that can come from having a fraudster rack up a bunch of bad debt in your name, putting you deep in debt and even the subject of debt collection lawsuits. It’s hard enough to solve your own debt, let alone someone else’s, so you’d be wise to proactively protect yourself from identity theft. 

You have options to protect your credit, such as placing a credit freeze or a credit lock on your credit report, but which one is right for you? Both can be valuable tools in combating identity theft, but how do they differ? Let’s compare the key features of each so you can make an informed decision about which is right for your situation. 

Credit lock graphic

The Power of a Credit Lock

The three main credit bureaus, Equifax, Experian, and TransUnion, offer a credit lock as a flexible shield guarding your credit report. Its ease of use is its claim to fame – with a simple click or swipe on the bureaus’ free mobile apps, you effectively lock down your credit. 

However, it’s important to note that a credit lock is not something the bureaus are required to offer and does not have oversight or cohesion from one bureau to the next. Without that oversight, the bureaus aren’t required to play by the same set of rules as a freeze; hence, its features may vary across bureaus. Moreover, a credit lock works like a virtual guardian and may not protect you from offline identity theft, such as someone opening an account in your name through non-digital avenues.

Advantages of a Credit Lock

  • Easily accessible through free mobile apps 
  • It can be quickly locked or unlocked with a click or swipe 
  • It may come with additional features, such as alerts about changes to your credit report 

Drawbacks of a Credit Lock 

  • Not legally mandated 
  • It may not provide the same level of protection as a freeze 
  • It may come with extra fees and unwanted offers for unrelated services

Exploring the Credit Freeze

Credit Freeze

A credit freeze is a preventative measure restricting access to your credit report from lenders, banks, and other creditors. Federal law mandates and oversees the credit freeze. It must be offered for free by the credit bureaus, and it provides a higher level of protection than a lock. 

Learn all about how to place a credit freeze to prevent identity theft.

Like a lock, initiating and lifting the freeze is done online or by phone. However, suppose you want to lift it temporarily for specific purposes, such as applying for a loan. In that case, when initiating the freeze, you may be asked to provide additional information like your address, date of birth, Social Security number, and PIN number.

Advantages of a Credit Freeze

  • Provides a higher level of protection than a lock 
  • Regulated by federal law, so it must be offered for free 
  • Prevents all credit applications from being considered while frozen

Drawbacks of a Credit Freeze 

  • It may take up to three days to lift the freeze 
  • May require additional information for the temporary lift 
  • Must place a separate freeze with each bureau to be fully effective 

Making a choice: Credit Lock vs. Credit Freeze 

Medical Debt in Collections

When deciding which tool is right for you, consider how you plan to use it and if you’re willing to pay for convenience. A credit freeze is free and can provide more protection than a lock, but it comes with the trade-off of more time and effort to initiate or remove. On the other hand, a credit lock is quicker and easier to control but may come with a cost and may not provide the same level of protection or be legally mandated. 

The good news? You can always change your mind and switch from one protective tool to another, or even use both! Regardless of which method you choose, taking proactive steps to protect your credit report can save you time, money, and headaches down the road. 

What to Do if You’re Already a Victim of Identity Theft 

If you’ve already fallen victim to identity theft, it’s important to take immediate action. Act quickly by notifying the proper authorities and credit bureaus and filing a police report, if necessary. You’ll also want to consider placing a fraud alert on your credit reports or a security freeze for added protection. 

A fraud alert is similar to a lock because it warns creditors that you may be the victim of identity theft. It lasts for one year without proof of identity theft, or you can place an extended fraud alert for seven years with an identity theft report, an official statement that documents the evidence of identity theft.

Seek Professional Help to Deal with Identity Theft Debt 

Some cases of identity theft may leave you with unresolved debt. Navigating the aftermath of identity theft can be overwhelming, especially when fraudulent debts are involved. When that’s the case, seeking professional assistance is essential to ensure your rights are protected so you can manage the situation efficiently. 

Our law firm has a dedicated team of attorneys familiar with identity theft and dealing with the debt left in its wake. With our expert guidance, we’ll help you dispute fraudulent debts, liaise with creditors, and take necessary legal steps to restore your reputation. 

Don’t let identity theft take control of your financial health. Contact us today, and let’s begin the journey to reclaim your financial standing. You’re not alone in this fight – we’re here to help you every step of the way.

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How to Freeze Your Credit to Prevent Identity Theft

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In our digital age, your personal information is more exposed than ever and, unfortunately, identity theft is no longer just a plot point in Hollywood movies—it’s a very real and sobering threat. The FTC identity theft report placed the cost of identity theft to consumers at nearly $8 billion in 2022.(1)

Imagine waking up one day to find your credit score plummeting due to fraudulent transactions you didn’t authorize. Scary, right?

But here’s the good news: There’s a simple but powerful tool at your disposal to protect yourself—a credit freeze. This under-utilized preventive measure serves as a first line of defense, safeguarding your financial future from the prying eyes of scammers.

Want to know more? Stay with us as we delve into the nitty-gritty of credit freezing and its role in combating identity theft.

Credit freeze on your credit reports is represented by this illustration of a snow capped credit card with icicles

What is a Credit Freeze?

A credit freeze, also referred to as a credit lock or a credit file security freeze, is a preventative measure that limits access to your credit reports.

A credit freeze prevents anyone—potential creditors, lenders, marketers, and especially identity thieves—from viewing the information in your credit files. By doing so, you stop fraudsters from opening new accounts or applying for loans using your personal information.

Unauthorized credit activities can have a negative impact on your credit score and financial standing. It’s worth noting that a credit or security freeze does not affect your credit score or prevent you from getting your free annual credit report. You can also still access your scores with credit monitoring services, so you won’t be totally left in the dark.

One in every 3 people is likely to be the victim of identity theft.(2) A credit freeze is a no-cost, low-risk first line of defense against becoming one of those three people.

How a Credit Security Freeze Prevents Identity Theft

Identity theft occurs when fraudsters use your personal information, such as your social security number and date of birth, to commit financial fraud. Scammers could open new credit card accounts, do credit checks, take out loans, open accounts, or perform other transactions that require credit achievable through your good name. The financial liability of these fraudulent activities can wrongfully fall on your shoulders, leading to potential legal issues and a damaged credit reputation.

A credit freeze is an effective barrier against this kind of identity theft.

When your credit is frozen, credit bureaus cannot release your credit reports without your express permission. You must manually lift the freeze, or ‘thaw your credit’ so that new lines of credit can be accessed.

This means that even if fraudsters manage to get hold of your personal details, they can’t easily use them to open new credit accounts, because a credit check is usually required to view your credit report before approving a credit-based application.

How to Freeze Credit Report

Steps to Freeze Your Credit Reports

Freezing your credit involves a series of steps that require careful attention. The procedure, though repetitive, is straightforward as long as you have all the necessary information on hand and can dedicate approximately an hour or two. Remember that any error, particularly about your personal identification card or information, can lock you out, halting the process.

You might like to know in advance that it can be frustrating to navigate the websites of the three major credit bureaus. Each requires a series of verification questions and highly unique passwords. Given the sensitivity of the data we’re working with, though, it makes sense that they really want to make sure it is you who is requesting the freeze. Misentering your personal information may prompt a fraud alert and potentially lock you out of your own credit report.

We’ll break each step down in more detail, but here are the steps to freeze your credit:

  1. Contact Credit Reporting Agencies to Place Security Freeze: You must contact the three major credit bureaus – Equifax, Experian, and TransUnion. These agencies are responsible for collecting and reporting your credit information, and they are the ones who can implement a security freeze on your credit.
  2. Provide Personal Information: Expect to provide several pieces of information to verify your identity. You will likely be asked for your name, Social Security number, date of birth, address, phone number, email address, and, in some cases, a picture of your driver’s license or other government-issued ID.
  3. Request a Freeze: After verifying your identity, you must request a credit freeze be placed. This can be done online from each of their individual web platforms, or if you prefer, each bureau also offers the option to place a freeze by phone.

Contact Credit Reporting Agencies to Place Security Freeze

The first step will be to go online to create an account with the bureaus so you can access and manage your credit report and, ultimately, place a security freeze on your credit report.

Information to have ready

In order to place a credit freeze effectively, there are several pieces of information you need to have ready to make the credit freeze process smoother and quicker. Plan to have the following information on hand to place the credit lock and limit access to your credit:

  • Your name
  • Your Social Security number
  • Your date of birth
  • Your current address
  • Your phone number
  • Your email address
  • A copy of your driver’s license or other government-issued ID

Having the right information ready when freezing your credit is critical, not only for a smooth process but also to avoid unnecessary delays.

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Create an Account with the Three Major Credit Bureaus

Before initiating a credit freeze, you’ll need to establish accounts with each of the three credit bureaus. Each credit bureau has a distinct procedure for credit account creation and credit freezing.

  • Equifax: To create an account with Equifax, you can visit their website and follow the account creation process, or alternatively, you can reach out to their customer service at 800-349-9960. After your account has been established, you can place a credit freeze online through your account or by calling Equifax at 800-349-9960.
  • Experian: For Experian, you can set up an account by visiting their website or by calling their customer service at 888‑397‑3742. Once your account is ready, you can request a credit freeze either online via your account or contact Experian by phone at 888‑397‑3742.
  • TransUnion: Finally, you can create an account with TransUnion by visiting their website or calling their customer service line at 888-909-8872. Similar to the other bureaus, you have the option to initiate a credit freeze through your online account or you can call TransUnion at 888-909-8872.

Credit Lock, Credit Freeze, and Fraud Alert- What’s the Difference?

Reading a credit report is confusing enough, let alone navigating the differences between a credit lock, credit freeze, and fraud alert. Let’s take a look at these three terms so you make it to the right place and don’t spend time or money on the wrong thing.

A credit freeze is the most powerful tool you have to prevent identity theft. The federal government requires that each major credit bureau make this option available to consumers for free. A credit freeze restricts access to your credit report and requires that any lender or creditor who tries to view it must first obtain your consent.

A credit lock is similar to a credit freeze, but it is less powerful and comes at a cost. Odd, right? Per federal law, credit bureaus are not allowed to charge for a credit freeze. As a way to offer additional products and services to their customers (and to monetize what the government forced them to give away for free) some credit bureaus created products similar to a credit freeze that they can charge for. National Legal Center does not see a significant benefit to consumers in choosing to place a less robust credit lock compared to a free and comprehensive government-mandated option of a credit freeze.

A fraud alert is also an effective way of deterring scammers from opening fraudulent accounts in your name, but it’s not as strong as a credit freeze. Fraud alerts notify lenders and creditors that you have been the victim of identity theft. Upon receiving this alert with a request for credit, the lender is prompted to spend extra time verifying the applicant’s identity before extending a line of credit. A fraud alert is a smart idea for anyone who has been a victim of identity theft in the past, and it can be used in combination with a credit freeze or credit lock. A fraud alert lasts for one year, or a long-term fraud alert can be requested, which lasts for 7 years.

Freeze your Credit

After successfully setting up your accounts, you’ll move to the critical step of formally initiating a credit freeze request with each credit bureau. This can be accomplished either online through access to your credit and accounts or over the phone.

  • Equifax: To request a freeze on your Equifax credit report, visit their freeze page online or contact their customer service at 800-349-9960.
  • Experian: For Experian, the process is similar. To enact a freeze on your Experian credit report, go to their freeze center online or call them at 888‑397‑3742.
  • TransUnion: Likewise, to place a freeze on your TransUnion credit report, access their freeze portal online or make a call to 888-909-8872.

Remember, it’s crucial to go through this process with each of the three credit bureaus. Initiating a freeze with only one credit bureau is like closing your front door while leaving the back and side entrance open. It will not result in a comprehensive freeze across credit scores with all three, leaving gaps in your protection against potential identity theft.

Try to access your credit report to confirm

Once you have requested the freeze with all three major credit reporting agencies and bureaus, you’ll want to ensure that the freeze has been effectively applied.

You can confirm your credit profile and credit reports are frozen by attempting to access your credit reports on your own. If the freeze is in effect, then you should not be able to view or access your credit report without first unfreezing it.

This is an important step in verifying that the security freeze has been placed on all three of your credit reports correctly. While it may not seem necessary to take this extra step, it is a crucial one, and can save you from any potential issues that may arise in the future.

By freezing your credit with the three major bureaus, you can rest assured that you are taking the essential steps to protect yourself and your financial information. With an effective security freeze, you lower your risk of becoming the one out of three who falls victim to identity theft.

How to Lift a Credit Freeze

The ability to lift or “thaw” a credit freeze lets you temporarily or permanently remove the credit freeze when you need to apply for credit.

Like placing the credit freeze, lifting a credit freeze requires contacting each credit bureau individually. When you begin they will ask if you are temporarily thawing your credit freeze or if you are permanently lifting the freeze.

A temporary lift, or “thaw,” has specific start and end dates, so plan accordingly when applying for new credit. The permanent removal process is equally straightforward, you simply do not place a date to resume the freeze.

You will need to repeat the steps to lift a credit freeze with all credit reporting agencies.

Maintain Regular Monitoring and Security Measures

While a credit freeze can effectively lock your existing account and prevent new accounts from being opened in your name, it doesn’t prevent fraud on your existing accounts. While a credit freeze locks just about everyone else out, you still have access to review your own credit reports. Be sure to monitor your financial accounts and credit reports to spot any suspicious activities.

Additionally, consider setting up fraud alerts and using credit monitoring services. Many of us can also become much more selective about sharing personal information. The less information we put out there, the less likely a fraudster will encounter it.

In Conclusion

Protecting your credit from identity theft requires diligence and smart security measures like credit freezes. While these steps might seem burdensome, they provide a strong line of defense against identity theft and can save you from the financial headaches that come from fraud. If you have delinquent debt or have been harmed by misreporting of information by a debt collector, our law firm can help you.

Get help with debt and stand up to unfair debt collection tactics with National Legal Center.

  1. FTC Press Release, February 2023; Accessed 07/26/2023 from FTC.gov
  2. Identity Theft Statistics; Accessed 07/26/2023 from identitytheft.org

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6 Ways to Take Control of Your Credit in 2022

6 Ways to Take Control of Your Credit in 2022

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As we move into the New Year, many of us are looking for ways to improve our lives. One area where many people could use some help is their credit score. Your credit score reflects your financial health and can affect everything from your ability to get a loan to the interest rate offered on a mortgage. Fortunately, there are several ways to take control of your credit in 2022 and improve your credit score.

Last week we explored the resolution to become debt free in 2022.

This week, we turn our eye to taking control of credit in the year ahead.

Let’s begin by looking at guidance offered by Attorney John Farrell, head of National Legal Center’s Credit Correction Division.

Building a Good Credit Foundation

“A key component to having good credit is to have “positive” open accounts with a sustained usage and payment history. Ironically, as we head into 2022, many individuals who have worked on getting negative items off their consumer credit report fail to realize the need to re-establish their credit and lay the solid foundation necessary for building a positive credit file. At one point, the main focus for many of us was the collection accounts or other derogatory items reporting on our credit. In an effort to improve our credit, we disputed the incorrect information with the credit bureaus and creditors, or it “fell off” the credit report over time.

Now that they are gone, we moved on with our life. However, we failed to focus on the rebuilding phase of our credit rating. Improving our credit is not simply removing the bad stuff. We must establish our credit foundation similar to when we began this journey many years ago. However, this process must be done methodically and gradually for many reasons. The old adage that “Rome was not built in a day” also applies to rebuilding one’s credit.

At first, one may consider applying for a personal loan or a credit building account now offered at many banks and credit providers. Others can take the traditional approach of applying for a credit card. Whatever one decides, we must be patient and not open too much credit at one time. Doing this can be counterproductive and lead the individual to incur additional debt that they may not be able to pay back thereby, creating a vicious cycle of debt, collections, and bad credit. The truth of the matter is that most of us need credit in order to operate in our financial society, but it must be done with knowledge and perseverance to see results and to enjoy the benefits of having a positive credit rating.”

Attorney John Farrell, January 2022

As we see from Attorney Farrell, improving a credit score boils down to two things:

  • Reducing the negative
  • Improving the positive

Let’s take a look at several ways you can achieve those two things and improve your credit score in the New Year.

Improving the Positive

You have a few options when it comes to improving the positive side of credit.

Before considering these approaches, ensure they fit into your big-picture financial plan. You don’t want to set yourself up for trouble by opening a line of credit you aren’t prepared to handle responsibly. Likewise, you don’t want to make qualifying for a home loan difficult by having too many lines of credit added to your credit profile recently. These are sound suggestions, but everything is relative and will hinge on your specific needs, goals, and circumstances.

Increase Credit Limits to Improve Credit

One of the biggest factors impacting your credit score is how much outstanding debt you have on all of your credit cards. One way to improve that factor is to increase your maximum available credit on some—or all—of the accounts, you hold by asking card issuers for increased limits. As long as you don’t go overboard and apply for too many new accounts in a short time, asking your creditors to increase your credit limits can be an effective way to improve your credit score in the New Year.

Leverage Trust as an Authorized User

Credit is trust. Sometimes, a lender is not prepared to trust you based on your credit history. In this situation, it can be helpful to leverage the trust of a family member or friend by being added as an authorized user on their credit card. Being added to the account will associate the entire credit history (good and bad) of the line of credit to your credit profile and can significantly boost the report of someone with a thin credit report.

Simply being added as an authorized user on someone else’s account can raise your credit score, but there are caveats to keep in mind.

As an authorized user, the entire account’s past and future credit activity will reflect on your credit report. If that account is not paid responsibly, then your credit score could suffer as a result. That’s why you need to ensure you’re added to accounts with individuals who have an excellent payment history.

Also, you don’t want to use this as a way to trick lenders or the credit scoring system. That’s not the point. The point is to leverage the trust of a friend or family to show the lender that they, too, can trust you.

There’s nothing wrong with taking steps to attempt to improve your credit score. Just make sure everyone involved understands what they are doing, why it will (or won’t) help them achieve their financial goals, and that the sole purpose of being added isn’t for the goal of increasing your credit score. In reality, the cardholder should be entrusting the new authorized user to use the line of credit, even if there are restrictions to the amount or types of purchases they allow.

Reducing the Negative

Now that we’ve explored ways to improve the positive side of your credit score let’s review how to reduce the impact of negative remarks on your credit report.

Again, the same disclaimer applies: these are broad strategies. Again, consider your specific financial goals and circumstances to determine if an approach is right for you.

Dispute Inaccurate Credit Information

One of the most effective ways to improve your credit score is to ensure the information on your credit report is correct and verifiable.

Per the Fair Credit Reporting Act, every credit report should only contain accurate information.

Errors can range from minor inaccuracies like misspelling your name or address to major problems like an account balance showing unpaid when you resolved it years ago.

Sometimes, you can fix these errors simply by contacting the credit reporting agency in question and asking them to update your report. In other situations, though, you may benefit from getting help from an attorney familiar with debt and credit matters. It will all depend on the complexity and severity of the situation.

Dispute Unverifiable Credit Information

According to Experian’s interpretation of the Fair Credit Reporting Act (FCRA), “Consumer reporting agencies must correct or delete inaccurate, incomplete, or unverifiable information.” Our consumer rights law firm helps people overcome debt and credit issues, and we share this interpretation.

Not only does the information contained in your credit report need to be accurate, but the information furnished needs to be capable of proving that it is accurate. If they can’t prove that something is true, it shouldn’t be on the report in the first place.

Now, this isn’t to say that you should go and dispute every negative item as that would be frivolous. However, suppose you have reason to believe that information on your credit report is inaccurate. In that case, you should consider disputing it to be sure it can be verified by whoever is reporting it.

Lower Outstanding Debt

Whether it’s credit cards or student loans, your outstanding debt is another factor that impacts your credit score. The amount of debt you carry compared to the amount of credit extended to you makes up 30% of your credit score. So, improving this area can greatly impact your overall credit profile.

If you can lower the amount of money you owe to creditors, this will help improve your credit score and potentially open up more doors for future borrowing if needed.

Plus, it’s just an all-around good idea to reduce the amount of debt owed, especially if you’ve fallen behind on credit cards in the past.

Deal with Collections

One of the biggest factors that can negatively impact your credit score is the presence of collections accounts.

If you have any negative or unpaid collection accounts on your credit report, it’s time to start taking control and getting rid of them. It may take some work—and it probably won’t happen overnight—but getting rid of these items will improve your credit score as well as increase your financial health overall.

Do you need help dealing with collection accounts? The debt settlement attorneys at National Legal Center are here and ready to help you resolve your debt as quickly and affordably as possible. Reach out to us today for a free case evaluation.

Why You Should Hire an FCRA Attorney

The benefit of hiring an attorney specializing in debt and credit law is that they are familiar with the Fair Credit Reporting Act. They know:

  • what specific reasons are necessary for items to be deleted or updated with a consumer reporting agency;
  • what creditors and collection agencies tend to report incorrect information;
  • whether a violation is actionable and worth pursuing FCRA litigation.

Some violations of the FCRA are worth pursuing beyond a simple dispute of the remark. In some cases, you might find an FCRA attorney can help pursue damages against the company reporting the incorrect information. If you believe you have inaccurate information on your credit report that has made it hard for you to qualify for the credit, reach out to us for a free evaluation of your case.

We hope that this article has been helpful and provides you with some useful tips on taking control of your credit in the New Year. Remember, it won’t be easy, but it is definitely worth it in the end. Good luck!

Struggling with debt? Use the form below to get in touch with us.

Free Credit Report

Free Credit Reports Every Week

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While having a credit lawyer can be very helpful in dealing with trouble on your credit report, a personal review and basic understanding is always the first step.

Surprising Information About Credit Reports

Do you know how frequently your credit report is updated?

It may surprise you that creditors or collection agencies can report account updates sporadically throughout the month, rather than a set standard such as the 28th or 1st of the month.

Because of this, your credit reports may fluctuate and could look different throughout the month depending on when your creditors report, and even which bureaus they’re reporting to. Yes, which bureaus. It’s a good idea to keep an eye on the reporting from all three of the major reporting agencies. The big three are Transunion, Equifax, and Experian.

Because of the possible sporadic reporting from one creditor to the next, it would be wonderful to have a very regular review of your credit report. Until recently, we’ve only been able to receive one free report per bureau, per year.

So, when is the last time you pulled a copy of your credit report?

If it’s been a while, that’s okay.

Remember that “You can’t go back and make a new start, but you can start right now and make a brand new ending.” – James Sherman

Recent news makes credit reports more accessible than ever, so now is the time to start writing your new ending.

Easier Access to Credit Reports

Annualcreditreport.com provides free credit reports from the three major bureaus well, annually.

Right now, however, you can pull free reports weekly through April of 2022. This free access to credit reports was enacted voluntarily by the major credit bureaus to help people deal with credit trouble during the pandemic.

We suggest taking advantage of this opportunity to monitor your credit and be on the lookout for any fraud or inaccurate information. If something doesn’t look quite right, be sure to investigate further.

Here’s what we suggest watching your credit reports for:

  • Name
  • Address
  • Date of Birth
  • Social Security Number
  • Employer
  • Accounts
  • Loans
  • Balances
  • Payment History

If you find major errors and need professional help, you’re not alone! The team at National Legal Center can help you determine if a credit lawyer could help you correct inaccuracies on your credit reports.

Good Habits for Good Credit

To keep your credit in good health, remember to keep your positive reporting items positive.

  • Continue making payments on your current accounts on time.
  • Keep your balances less than 30% of the credit limit.
  • If you have accounts that have always been current, be sure to keep them open.

In addition to frequently checking your credit reports, it’s a good idea to monitor all of your financial accounts consistently. Keep an eye on your bank accounts, credit card accounts, car loans, personal loans, and any others. A watchful eye will help you have a good understanding of your financials. It can also help ensure you’re not making late payments, which can negatively impact your credit score.

There are many free tools available out there for monitoring your finances. Be sure to utilize them to stay on track with your goals, and to #standuptodebt for those of you out there on your journey to become debt-free.

Additional Resources

The Federal Trade Commission focuses on educating consumers and provides great information on better understanding credit reports. Find that and more by visiting https://www.consumer.ftc.gov/articles/free-credit-reports

To get your free credit reports, visit www.annualcreditreport.com or call 1-877-322-8228.

You can also print and fill out a paper form (https://www.annualcreditreport.com/manualRequestForm.action) and mail it to their office at:

Annual Credit Report Request Service

PO Box 105281

Atlanta, GA 30348-5281

Additional formats are available as well, such as Braille, large print, and audio. https://www.annualcreditreport.com/accessibility.action

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