Consumer Credit Freeze: How to Combat Identity Theft

Victims of identity theft are justifiably concerned about their credit reports. If you are an identify theft victim your first move will be to create an Identity Theft Report. Your next decision will involve whether or not to place an extended fraud alert or a credit freeze on your credit file. The information provided here is from The Federal Trade Commission website, with comments from Drew Isler, a Customer Credit Expert at Cumulus Funding.

Which is the best option? An Extended Fraud Alert? Or a Credit Freeze? According to the FTC, key differences between these two options include:

  • A freeze generally stops all access to your credit report.
  • A fraud alert permits creditors to get your report as long as they take steps to verify your identity.
  • The availability of a credit freeze depends on State law or a consumer reporting company’s policies.
  • Fraud alerts are federal rights intended for people identity theft victims.
  • Some States charge a fee for placing or removing a credit freeze.
  • It’s free to place or remove a fraud alert.

Let’s say that you choose to put a credit freeze on your file. Remember that a credit freeze may not stop misuse of your existing accounts or other problems caused by identity theft. Companies that you do business with would still have access to your credit report.

Although rare, when we see a credit freeze at Cumulus Funding it immediately raises a red flag since credit freezes are typically put there for a reason, after fraud is detected. It is still possible to apply at Cumulus Funding with a credit freeze, but a special access code from the credit bureau is needed in order for us to gain access to your credit report. The process for lifting a credit freeze depends on the credit bureau, but it is typically easy and immediate once identity is confirmed.

It’s important to know that putting a credit freeze on your credit file does not affect your credit score. However, if you want a business, lender, or employer to be able to review your credit report, you must ask the credit reporting company to lift the freeze. You can ask to lift the freeze temporarily or permanently.

The cost to place and lift a freeze, and how long the freeze lasts, depend on State law. According to the FTC, “In many states, identity theft victims can place a freeze for free, but in others, victims must pay a fee, which is usually about $10. If you have a police report, you may be able to place or lift a freeze for free. You must pay the fee to each credit reporting company. Cost and lead times to lift a freeze may vary so you may want to check with state authorities (find them at or the credit reporting companies in advance”.

A fraud alert is quite different from a credit freeze. This is a credit bureau’s way to alert lenders as to the possibility of fraud connected to a consumer’s credit history. Isler reports, “A fraud alert can be triggered by a number of different factors. For example, if any of the information on a Cumulus Funding application does not correspond exactly with information on the credit bureau, a fraud alert will be triggered. When this happens, we take extensive internal measures to validate the consumer’s identity”.

Creating an Identity Theft Report is the first step to take in order to get an extended fraud alert on your credit file. Placing an extended alert on your file allows you to get 2 free credit reports within 12 months from each of the 3 nationwide credit reporting companies. Also, the credit reporting companies will have to take your name off marketing lists for prescreened credit offers for 5 years–or until you ask to be put back on the list. The extended alert lasts for 7 years.