Credit freezes, also known as security freezes, prevent a credit-reporting company from releasing information in consumers' credit files to lenders and others without their authorization. New York law outlines the steps residents of the state must take to put a security freeze on their credit reports. However, state laws also place limits on credit freezes that sometimes make them unenforceable when a consumer's credit information is requested.
Credit-Freeze Requests
A credit freeze can be a deterrent to financial fraud because it's intended to keep credit cards, loan accounts and other credit-related services from being approved in your name without your knowledge. According to the Experian credit-reporting company, New Yorkers must request a credit freeze in writing either by certified or overnight mail. However, Experian also warns consumers that placing a security freeze on their credit files can delay approvals for loans, credit cards, insurance policies, government benefits and other requests consumers make to open new accounts or receive services that require a credit check.
Lifting Freezes
New Yorkers who choose to place a freeze on their credit reports receive a password or personal identification number they can use to allow the release of their credit information to a particular company or for a specified period of time. Experian says a credit-reporting company must allow the release of a credit report within three days of receiving a consumer's authorization to do so.
Experian recommends consumers plan ahead and lift freezes before they apply for mortgages, car loans or other accounts to avoid delaying the application process.
Unenforceable Freezes
There are circumstances under which credit freezes are invalid. According to the TransUnion credit-reporting company, state laws allow your current creditors to request a copy of your credit report for debt-collection purposes, fraud prevention, account reviews to raise credit lines and other purposes even if a security freeze is in place. Law-enforcement and child-support agencies and courts also can review credit files that have security freezes.
Costs
New Yorkers who want to place a credit freeze on their files at the national credit bureaus Equifax, Experian and TransUnion must submit a security-freeze request to each company. The fees vary, but you will usually pay about $5 to place, remove or temporarily lift a security freeze. However, the service may be free if you are a victim of identity theft and can provide credit-reporting companies with an identity-theft report issued by a law-enforcement agency.
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