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Saturday, July 24, 2010

Lock your credit histories and further protect your identity

When applying for a mortgage, it's easier - and you can get better interest rates - with a clean credit history. Consider putting a security freeze on your credit report. (Doing it yourself is easy - and much less expensive - than paying one of the companies that wants to charge you a monthly fee for doing the same thing!)

Upsides:
  • No one (including you) can open “instant credit”. It takes additional action on your part to unfreeze your reports first.
  • You must have a special identification number to open your credit file (the number is sent to you when you request the freeze).
  • You can lift the freeze immediately, temporarily, permanently, or for a specific business or lender any time via phone or the web.
  • Companies you’re already doing business with can continue to access your information. 
  • If you have a police report documenting identity theft against you, you can freeze and unfreeze your histories for free.
Downsides:
  • You have to plan ahead if you want to open a bank account, line of credit, or investing account with a new institution.
  • Depending on which state you live in, the cost for freezing your history with each agency may cost you up to $10.
  • Depending on which state you live in, it may cost you an additional $10 with each agency to “unfreeze” your credit to open a new line (I have successfully negotiated reimbursement for that to come from the company that wants to grant me credit, however).
Further information on security freezes is available at the web sites for each of the three agencies (the specific links change from time to time, so here’s the landing pages - search for "security freeze" once you get there):
The credit reporting agencies are not particularly enamored of security freezes, since they make it harder for companies to send unsolicited offers of credit.

While you're at it, opt out of receiving pre-approved credit offers or offers of insurance at 1-888-5OPTOUT begin_of_the_skype_highlighting              1-888-5OPTOUT      end_of_the_skype_highlighting, or at www.optoutprescreen.com - this will reduce or eliminate credit card offers being sent to you (and then waiting in your mailbox to be stolen).

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