In an effort to give consumers more control over their credit files and to deter identity theft, two major credit reporting agencies announced plans to grant credit freezes to all consumers. Beginning Oct. 15, TransUnion will give consumers in all 50 states the ability to freeze credit files. Equifax announced it would have a similar plan in place sometime in October, with Experian expected to do the same. 

The TransUnion plan allows free freezes for identity theft victims. Non-victims will pay $10 each time they wish to place a freeze on their credit file, and another $10 fee to unfreeze the file, all done by telephone and with a personal identification number (PIN).  The plans announced by TransUnion and Equifax won't preempt state laws establishing state-set prices on freezes.

Credit file freezes are different from fraud alerts, which last for 90 days and notify potential credit grantors to verify your identification before extending credit in your name in case someone is using your information without your consent. In contrast, file freezes prevent third parties from receiving a copy of your credit report or credit score, making businesses less likely to grant credit to the identity thief trying to set up false accounts in your name.

Despite the added protection, file freezes don't prevent identity theft entirely, because of the many types of ID theft perpetrated by thieves. Thawing your credit freeze won't take much time; credit bureaus can unfreeze your account in as little as 15 minutes. 

(CUNA News Now, October 2, 2007)