What is a Credit Freeze?

Credit freezes became available to everyone in all 50 states on November 1, 2007. Until that time, you couldn't get them in most state unless you were a victim of identity theft.

A credit freeze allows you to completely restrict access to your credit report. If you place a freeze on your report, potential creditors and certain other people or businesses can’t get access to it unless you lift the freeze temporarily or permanently.

This restriction applies to you as well. You cannot get any kind of new credit until you 'thaw' your credit at all three credit reporting agencies - Experian, Equifax and TransUnion.

A credit freeze does not:

• affect your credit score
• keep you from getting your free annual credit report
• keep you from buying your credit report or score
• affect you when applying for a job
• affect you when renting an apartment
• affect buying insurance

A credit freeze isn't free like a fraud alert. It costs $10 per credit bureau in most states to freeze and another $10 per credit bureau to lift the freeze or 'thaw' it. To refreeze, it's another $10. This comes to $30 each time you want to make changes. The cost depends on what state you live in - some states have mandated a lower rate.

This is a very effective way to keep anyone from opening a fraudulent account in your name. It's not for everyone though because you can't apply for new credit yourself without thawing. It also can take up to a couple of weeks for the process to complete.

Go here for more info on how to place a credit freeze.