Ohio Joins Other States in Embracing the Credit Freeze

Many states are embracing the credit freeze as a way for people to protect themselves from identity theft. This time Ohio is joining the states that allow residents to freeze their credit beginning Labor Day 2008. For $5 per credit bureau, Ohio residents can purchase a credit freeze to keep their credit reports from being viewed without them making the reports available by "thawing" them.

While no method of identity theft protection is completely fool proof, a credit freeze is definitely a helpful tool in protecting yourself from financial ID theft. What the credit freeze does is locks your credit report from anyone trying to extend credit to you. No potential creditor can view you credit report without you "thawing" it for them (something you would do if you apply for a loan or a credit card). So if an identity thief applies for credit in your name, he or she will be turned down since the company will not be able to view your credit report.

What can a credit freeze not prevent? As I said, there is no perfect identity theft prevention service. It doesn't protect your existing accounts. Current bank and credit card accounts will still need to be reviewed carefully and regularly. Also, some service accounts can be opened without a credit check, like phone and other utilities. Finally, it won't prevent unauthorized use of medical insurance (medical identity theft) or someone giving your name during an arrest (criminal identity theft).

Yes, it's limited, but unlike many so-called identity theft protection services, a credit freeze can actually protect you rather than just monitor your credit and alert you to unauthorized activity. I don't usually don't encourage people to purchase services, but for Ohio residents, this could be the best $15 you spend in a while.

Credit Freeze to Help Prevent Identity Theft

The credit freeze is one of the best tools you can use to help prevent identity theft. A credit freeze allows you to lock the data in your credit report at the credit reporting agency until you give them permission to release it. Without access to your credit report, an identity thief will have a lot of trouble gaining credit in your name.

Until recently, a credit freeze could only be made possible by state law, and you could not block your credit report if you did not live in a state that allowed it. However, starting in October, two of the big three credit reporting agencies will allow you to freeze your credit report no matter what state you live in. TransUnion and Equifax will let you obtain a credit freeze, and you don't have to be an identity theft victim to do so. But you will have to pay for it.

This is definitely a great way to help prevent identity theft, but it will only be effective if Experian offers a similar credit freeze service. In the mean time, if you live in one of the states that allows a credit freeze, you can have a credit freeze if you are a victim of identity theft or if your information has been compromised. This will give you control over who can access your credit report at all three agencies and will help you prevent identity theft if it hasn't already happened.

Fraud Alert: Does it help?

So, have any of you Ohio tax payers received your letter from the state of Ohio saying your name and Social Security number were on that stolen laptop? The state has offered those concerned about identity theft one year of protection services with Debix with no charge to the potential victim. Or maybe you don't live in Ohio but suspect you might be a victim (or potential victim) of identity theft. There is something else you can do to protect your credit.

One thing the Federal Trade Commission recommends is placing a fraud alert on your credit reports.

But what is a fraud alert? The major credit reporting bureaus attach to your credit report (at your request) to let potential creditors know that your data has been compromised, and before opening any kind of credit account (credit cards, loans, cell phone accounts, etc.), they should contact you by phone to confirm that it is actually you requesting this credit. It also entitles you to a free copy of your credit report. The initial fraud alert can be placed if you suspect you are a victim (or a potential victim) of identity theft and is effective for ninety days. You can request an extended fraud alert, but you must provide a copy of your identity theft report.

So does it help? Yes and no. It depends on whether or not creditors are willing to call you. Some will contact you as they should, and others will not. With companies that don't, some will automatically deny credit, which is only a problem if you are trying to obtain a loan or credit card. Others may ignore it and approve the account anyway. That's when you have to worry.