On September 21st, the Economic Growth, Regulatory Relief, and Consumer Protection Act will take effect. Three major changes the bill brings are:
- The ability to freeze your credit report for free. Before, depending on what state you live in, there was a charge applied for this service. This new law ensures that credit freezes are free, no matter where you live.
- The ability to freeze your child’s credit for free no matter where you live. Before, this was only offered in some states.
- Extended fraud alerts. For individuals notifying a credit bureau that he/she believes they have, or may become, a victim of fraud or identity theft, fraud alerts will now be in place for a full year rather than just 90 days.
We’ve written about credit freezes and fraud alerts in the past, and we thought it timely to again emphasize what they are, and what they can and can’t do.
Placing a credit fraud alert with the credit reporting agencies (“CRAs”) requires a creditor obtaining your credit report or score to take steps to verify your identity first, such as calling you. This applies to not only applications for new credit, but also to requests for an additional credit card or increasing your credit limits.
A credit freeze prevents creditors from accessing your credit reporting file or your credit score. It must be applied separately to each CRA. When a credit freeze is in place, no credit applications can be processed which protects you from identity theft. But remember, they do not work retroactively. If someone has already stolen your credit information/identity, a freeze will not help. That is why we strongly suggest constant credit monitoring through free services like Credit Karma or Credit Sesame.
For more information on the new legislation, visit the Federal Trade Commission website. And, as always, should you have any questions or credit issues, contact us.