A new law was passed that allows consumers to make credit freezes for free in every state.
Credit freezes have historically been a good way to protect consumers from identity theft, pushing federal lawmakers to pass a law that would protect consumers for free. As of Friday, the new federal law is in effect, allowing consumers to freeze and unfreeze their credit at Experian, Equifax and TransUnion, the three major credit bureaus.
Consumers will be able to do so for free now as it previously cost consumers in nearly half the states between $3 to $12 per bureau to freeze or unfreeze their credit reports. The main reason why this move is effective at preventing identity theft is because it prevents lenders from pulling a consumer’s credit report.
Doing so is an essential part of applying for a loan or credit card but some criminals would use the opportunity to open a new account under another person’s name or under the name of someone in their family.
The new credit freeze law will also show consumers a fraud alert that remains on their credit reports from 90 days to one year. These alerts inform lenders on whether or not their personal data may have been leaked or compromised, offering them additional steps to verify their identities when applying for a loan or credit line.
