What is a credit freeze?
In 2007, nearly 9 million people in the United States were victims of identity theft. Repairing the damage done by identity theft is both time consuming and expensive. The average victim of identity theft spends more than 30 hours on the phone, sending emails, writing letter, contacting creditors, and filing police reports to try and restore funds and repair credit. And it's also costly; the average victim also spends at least $500 out of pocket trying to recover their funds that occur when someone steals your identity. Identity theft can be as simple as stealing a credit card, maxing it out and not paying the bills, leaving your credit damaged, or it can be as complicated as using your social security number and bank account information to take out loans or open up credit cards.

Because of the harm and hassle that goes with identity theft, many people are taking tougher measures to protect themselves from identity theft. One of the things consumers can do is get a credit freeze. A credit freeze puts consumers in control of their credit reports by limiting how the credit reporting agencies (Equifax, Experian, and TransUnion) can use your information. A credit freeze locks all of your data, so if someone were to try and get a loan or open a credit card using your identity, they wouldn't be able to since your credit information is locked. Many financial experts consider a credit freeze to be the most effective and secure way of protecting yourself from identity theft.

When you apply for any type of credit, whether you want a loan, a credit card, or are trying to rent an apartment, your credit is run and the credit reporting agencies provide the company with your credit report. If the loan or line of credit is approved, it too is added to your credit. Unfortunately, people steal identities and open up lines of credit specifically so they won't have to pay. As a result, the victim's credit is destroyed because they don't even realize these new lines of credit are being open. With a credit freeze, the credit report can't be obtained, so credit isn't issued.

What are the pros and cons of a credit freeze?
While a credit freeze may sound like a smart option, it is important to weigh the pros and cons before continuing with one. The following are some of the benefits of a credit freeze:

• Enhanced security. Perhaps the most effective way to protect yourself from identity theft. A credit freeze won't stop a thief from stealing credit cards and incurring charges on them, but it will stop them from opening up new lines of credit in your name that will in turn affect your credit rating.
• Prevention. If you have already been a victim of identity theft, freezing your credit will prevent any further lines of credit being open in your name and with your information.
• Cost. If you are a victim of identity theft, most often the fees associated with freezing or locking your credit are waived.
• Peace of mind. With credit theft on the rise, many people enjoy the increased peace of mind that comes with knowing no one will be allowed to open new credit lines in their name.

You should also be aware of the downsides that may come into play when you freeze your credit. Some of these include:

• Not available everywhere. Most states are moving towards laws that will allow you to freeze your credit at your desire; however, not all states will let you do this.
• Doesn't allow you to apply for credit. Placing a freeze on your credit also prohibits you for applying for any lines of credit. So if you want to remove the freeze in order to apply for a credit card, loan, or any other line of credit, you will have to wait at least 3 days and pay a fee to have it unfrozen.
• Can be costly. In order to freeze your credit, you have to contact all three credit reporting agencies. Each of these charges a fee of $10, so you will usually end up paying $30 each time you freeze your credit. There is also a fee to unfreeze it, so continually freezing, unfreezing, and then freezing it again can become costly.

Who is eligible for a credit freeze?
Anyone can get a freeze on their credit that lives in a state that has laws supporting it. Currently, 35 states will allow you anyone to freeze their credit. These include California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Indiana, Illinois, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania,
Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Washington, West Virginia, Wisconsin, and Wyoming.

In Arkansas, Kansas, Mississippi, South Dakota, and Washington, credit freezes are available to victims of identity theft only. However, more and more states are allowing anyone to freeze their credit.

How do I get a credit freeze?
In order to put a freeze on your credit, you must go through all three credit reporting agencies-Equifax, Experian, and TransUnion. Check with each agency, but typically the process will go something like this:

• First, send a written request to the credit agencies. You can also request by phone if you live in Minnesota, New Mexico, District of Columbia, and North Dakota. In your written request, make sure you put your name, address, social security number, and credit card number to pay the fee, if you are being charged one.
• If you have an internet connection, it is often faster to apply via the website. They have a form you can fill out online that will also freeze your credit.
• Include necessary documentation. You will also be required to provide proof of your current residence. This can include an ID card issued by your state, or a driver's license.
• Once the company receives your request, your credit freeze will be applied. The time it takes for it to take effect depends on your state, as each state has differing laws regarding the amount of time they have to add the freeze. The credit agency will then send you a verification letter and a PIN number. It is very important that you save this PIN number or write it down somewhere; you will need it when you want to have the freeze removed later on.
• If the fee is waived for either your age or because you were a victim of identity theft, make sure you include documents that can back it up, such as a certified copy of your birth certificate or police reports that can confirm you were a victim of identity theft.

If you don't use the online forms, the credit reporting agencies and their addresses for credit freezes are:

Trans Union
Fraud Victim Assistance Department
PO Box 6790
Fullerton, CA  92834
www.transunion.com

Equifax
888-766-0008
Consumer Fraud Division
P.O. Box 740256
Atlanta, Ga. 30374
www.equifax.com

Experian
888-397-3742
P.O. Box 2002
Allen, Texas 75013
www.experian.com

How do I remove the credit freeze?
At some point, you will probably need to remove the credit freeze. There are many reasons you may need to have your credit run. Not only is your credit history pulled if you need to apply for a loan of any kind, or if you want a credit card, but many times, prospective employers will also do a credit check before you are hired. Landlords will also run credit checks from time to time. Getting a cell phone, utilities, and so forth will also look at your credit history.

If you want to remove a credit freeze from your report or at least have it temporarily lifted, you need to plan ahead. Typically, it takes around three business days, so make sure your credit can be accessed before you apply for any loans or credit cards.

To remove a credit freeze, you can go online and follow the directions for filling out their forms to remove the freeze. They will ask you to provide the PIN number you were given in the letter when you originally asked for the freeze. Again, you will need to do this with all three of the credit agencies if you want the freeze to be taken off.

If you are concerned about the safety of your credit report as well as your own identity and financial security, you may consider freezing your credit. And if you have been a victim of identity theft, or if you suspect you may be a victim, a credit freeze is a good option for protecting your information.