Credit Freeze

CREDIT FREEZE….When a business ? or a fake business run by ID thieves ? requests a credit report, normal practice is for the report to be immediately turned over with no questions asked. A “credit freeze” is an option that turns this around: if you put a freeze on your account, lenders are prohibited from reviewing your credit report unless you give your permission. This prevents most ID fraud since lenders generally refuse to issue credit without first seeing a credit report.

Four states have laws that allow you to freeze your credit report, but USA Today reports that credit reporting agencies oppose extending this to other states or to the federal level:

Lenders, credit bureaus and businesses argue that the inconvenience created by a credit freeze outweighs potential benefits. Credit-freeze laws allow consumers to “unfreeze” their reports, but that typically takes about three days.

In the meantime, a consumer could miss out on a low mortgage rate or one-time credit card offer, says Nessa Feddis, senior federal counsel for the American Bankers Association. “It sounds good, but people don’t realize how often they request their credit reports be pulled for a good deal,” she says.

I have an idea to fix this: don’t take three days to unfreeze the report. In fact, I have a better idea: by default, personal credit reports should never be shown to anyone until the credit reporting agency contacts the consumer independently and receives permission to do so. This could be by phone, internet, or mail.

This would slow down credit authorizations slightly and would increase the cost of doing business for credit agencies, since they would be responsible for contacting consumers whenever someone requests a credit report. Tough. Consumers should have absolute control over their own credit information. This is especially true given the skyrocketing incidence of ID fraud and the obvious inability of credit agencies to keep personal information secure. It’s time to shut down the ID thieves, and this is the way to do it. Someone needs to start making a stink about this in Congress.