Changes to Consumer Law Means Zero Fees for Freezing Credit Files

The costs for consumers to freeze their credit reports will soon be free. In a big win for consumers who want to protect their credit report from being pulled without their consent, and prevent identity theft, credit agencies will longer assess a fee after September 21, 2018.

 

A “security freeze” or “credit freeze” is designed to prevent lenders from accessing a credit file, which also stops identity thieves from gaining access to a person’s credit file. It is seen as a very useful tool to block an unsuspecting person’s credit report from being used to obtain credit cards, loans, and other financial resources. The freeze is completely different than a credit alert, which only identifies the credit file for needing to contact the consumer prior to issuing credit. When a person freezes their credit report, the credit bureau is prohibited from granting access to the file.

 

The reform of the Dodd-Frank law will now have a federal rule that prevents the need for consumers paying to have their credit file temporarily lifted when they need to apply for credit, or for employment purposes. Currently, consumers have to pay a nominal fee that varies between $2 and $10 each time they need to have the file unfrozen. The unfreezing process has to be completed for all major credit bureaus, which can cost an average consumer $60, or more, depending on their individual circumstances.

 

With the recent breach by Equifax of 148 million consumers and identity theft on the rise, the ability to have the flexibility to freeze and unfreeze a credit file for free is a step in a positive direction for consumers.

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