Basics of freezing credit reports

Credit reports help to determine the financial creditability an individual experiences in terms of getting loans, mortgages, credit cards etc. This information is available to most companies that have a vested interest in your finances. The credit report being available to many people brings up the problem of fraud. To avoid frauds where some one else borrows money in an individual's name, the concept of Freeze credit reports have arisen.

Freezing credit reports means the freezing or blocking the credit report from the view of others. Here, when a credit agency wants to check your financial records it may not be able to do so. This does not mean your account is blocked forever. When freezing credit reports, the user is given an individual PIN number that can be accessed only by the user. The individual's name, date of birth, social security number etc. will not help to unblock the report and re-establishes the security it provides.

This is different from that of an alert and is more advanced. An alert on credit report is where the user is always notified when a transaction is being done. It may be a borrowing or a new credit card etc. The user is called on behalf of the reporting agencies to confirm their request, but in freeze credit reports the individual is the only person who has sole rite to his reports. When the need arises for a creditor to view it the agency notifies them that the account is frozen. This does not mean you will not receive credits now that it is blocked; by using your PIN number you can unblock it for the time required for you to continue your business.

To freeze credit reports the user must contact all three credit-reporting agencies by writing a letter. The account will be frozen within 5 working days. In most states you can freeze your credit report for free if you are a victim of theft. If not then you have to pay a minimum fee of $10 each for the three agencies. The states of California, New Jersey, Louisiana, Texas, Vermont, Washington, Nevada, Connecticut, Illinois, Maine, North Carolina and Colorado have given their citizens the right to freeze their credit reports.