I am currently recieving SS Disability, however I am about to reach age 65. Will this affect my current benefits? Can I recieve both benefits? Should I do nothing.
Freezing Your Credit Report Can Prevent Identity Theft
Identity theft is a major concern these days and advancements in technology continue to aid criminals in perfecting their skills and techniques. However, beyond your standard identity theft tips you can go one step further and consider a credit freeze.
When a person wants absolute assurance that criminals will not be able to access their credit accounts, they can request that a freeze be placed on their credit reports. When a credit report freeze is in place, no one can open a credit card account or take out a loan or mortgage in the account holder’s name, not even the account holder. The freeze can be lifted or “thawed” by using the Personal Identification Number (“PIN”) or password which is given by the credit bureaus when initially requesting the freeze. However, a credit report freeze doesn’t usually apply to account relationships already in existence as these creditors, lenders, etc., will still have access to reports to fulfill basic activities such as account reviews and fraud control.
All states with the exception of Alabama, Michigan and Missouri have adopted the mandatory security freeze laws. The states of Arkansas, Kansas, Mississippi and South Dakota limit this protection to identity theft victims only. However, Equifax, Experian and TransUnion now extend credit freezes to all who request it, even if they reside in the states which haven’t yet approved this process in whole or in part. These three major credit bureaus request the same information in variation:
- letter sent via certified mail with requestor’s name, address, date of birth and SSN;
- copy of utility bill;
- copy of driver’s license;
- police report if the person is a victim of identity theft;
- past addresses dating back two years; and
- payment for processing fee.
A freeze should be requested at all three bureaus in order to be effective and a person should confirm exactly what is needed with each bureau. Credit report freezes are free for identity theft victims but for those who are requesting it as a preventive measure, the fee is usually between $5 and $10 at each bureau and for most states. In addition to the three major credit bureaus, consumers should also check the laws in their own states regarding this process as requirements and fees will vary.
If you choose to issue a freeze by mail, the contact information for the three credit bureaus is as follows:
- Equifax Security Freeze, P.O. Box 105788, Atlanta, GA 30348 [Online Application]
- Experian, P.O. Box 9554, Allen, TX 75013 [Online Application]
- TransUnion, Fraud Victim Assistance Department, P.O. Box 6790, Fullerton, CA 92834 [Online Application]
Fraud Alert vs. Credit Freeze
There are similarities as well as differences between credit freezes and fraud alerts. Neither prevents a person from accessing the credit they already have. With fraud alerts, electronic red flags are placed on credit reports at all three credit bureaus. In an effort to prevent fraudulent actions from occurring, verification of the identity of someone who applies for credit under a name that has this red flag is supposed to be checked into more thoroughly. On the other hand, when an application for credit is submitted under a frozen account, the only information that will be shown is a code stating that all reports under this name are frozen and there is no further access to the account.
For the legitimate consumer, the down side to a credit report freeze is it could delay, interfere with or prohibit the timely approval of any financial requests or applications occurring after the freeze is in place. If a consumer wishes to temporarily lift the freeze to complete a specific application process (i.e., applying for a loan), they can do so but they will have to pay to unfreeze their files and pay again to put the freeze back into place. To activate the thaw, temporary or permanent, the consumer must present the following information to the credit bureaus:
- information verifying identity;
- PIN or password given; and
- A letter requesting the removal of the freeze, and if temporary, either the name of the person or business to have access to the credit files or how long the files should remain available.
Putting fraud alerts into place is free and is a simple procedure of calling all three credit bureaus. Putting a credit freeze into place is a more involved process and therefore should entail thought, consideration and planning before deciding to execute the process. Of course, if you aren’t in the market for a loan and won’t need to borrow money for a while the freeze is a surefire way to prevent somebody else from using your credit.
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Filed Under: Credit Cards
About the Author: Jeremy Vohwinkle is a Chartered Retirement Planning Counselor® and spent a few years working as a financial planner. Today, he helps people make the most of their money by writing about personal finance here and elsewhere on the web. Jeremy is also Coach at Adaptu and a regular contributor for other publications such as Intuit, and American Express. Be sure to follow Jeremy on Twitter or Google+.
It's sad how prevalent identity theft is these days. A good friend of mine was recently hit by a drunk driver, and her car was totaled (she fine was). However, when she went to buy a new car, she was declined for the car loan. The loan officer told her that she was late on her current car loan and that she was late on 4 other lines of credit. She was very confused, because she hadn't had a car loan in years. It turns out that someone had stolen her identity and opened all of these lines of credit in her name, and immediately stopped paying them. Now she has spent the past month fighting the credit bureaus and banks to get her financial house back in order.
It would almost be more beneficial to have a pin from day one for all credit bureaus. This would make it more difficult to commit identity theft in the beginning!
I really want to thank you for posting this piece about Credit Reports. I don't think people put as much effort as they should into protecting their identities, I know I've seen it in the people I've counseled. I'd like to just reiterate though that if you have a Freeze then unfreezing or thawing takes a little bit of time so don't expect for it to be done while your at the loan office applying for something.