What is a credit freeze?

A credit freeze is the simplest way to avoid identity theft in America. A credit freeze allows individuals to control how US Consumer Reporting Agencies release credit information, including credit reports. Today, credit freezing is a common practice throughout America, and while it is the quickest way to avoid ID theft, it also makes receiving a bank loan more difficult as well.
Credit freezes have been made possible by the passage of either state laws or industry-wide standards. The only two states in America to not hold credit freeze laws are Michigan and Alabama. Many Senators and House Representatives are calling for a national standard for credit freezing, and there is a discussion in both houses of Congress to pass a credit freezing bill to set these standards.

The biggest advantage of freezing credit is its ability to stop identity theft. Identity theft is most common when individuals take out credit in another individual’s name, and in order to take out credit, loan agencies must first receive credit history and the credit report from that individual. When credit is frozen, that information cannot be taken out by loan agencies, therefore no credit can be given out, thereby lowering the ability for individual’s identity to be stolen.

While freezing credit is a simple and affordable way to be safer from identity theft, it can also lead to problems as well. In order to apply for credit yourself, the credit needs to be un-frozen first. This process of both freezing than un-freezing credit history can oftentimes be complicated and tedious, and lengthen the application time for receiving a credit loan.

With the future of national credit freezing legislation on the horizon, it will soon become easier for individuals to freeze and un-freeze their credit. Many industry analysts have spoken about the probability of online freezing capabilities for those individuals keeping a close eye on their credit. This would greatly reduce the disadvantages of freezing credit and hopefully keep more people free from identity theft.

Note: Credit bureaus generally charge $10 to freeze and another $10 to unfreeze a credit report, unless restricted by state law. A fraud alert can also prevent identity theft, but it must be renewed repeatedly to provide ongoing protection.

Jonathan Boral

Jonathan Boral

Jonathan Boral, a junior at the University of North Carolina’s Kenan-Flagler Business School, grew up in Charlotte, North Carolina an avid fan of film, television, and music. He has spent many hours finding the delicate balance between his love for acting, business, and the entertainment industry. Through his school career, he has appeared in several different shows, including the musical Annie and Laughter on the 23rd Floor. Not only as an actor, but he has also been able to see the production side of shows as the Stage Manager for Oh Dad, Poor Dad, Momma’s Hung You in the Closet and I’m Feeling So Sad. Constantly finding new ways to study the business and production aspects of film and television, he has spent time researching box office returns and film production values, in hopes to one day writing for an entertainment journal, or working as a film producer or talent agent. He plans on further pursuing his knowledge of the business world by becoming an active member of the Marketing and Entrepreneurship Clubs at Kenan-Flagler Business School.

Currently at UNC, Jonathan has received numerous honors. Most highly is his position as the Vice President of the Omega chapter of Alpha Epsilon Pi, North America’s largest Jewish Fraternity. Along with this leadership position, he has been nominated for many achievements, including the National Society of Collegiate Scholars, the Leadership Advantage Program, the National Society of Leadership and Success, along with being on UNC’s Dean’s List for multiple semesters.

Now residing in Chapel Hill, he hopes to use his articles as an outlet for further business and financial knowledge, along with connecting to his readers with his youthful perspective. In his free time, he enjoys watching all types of films, playing with his dog Hutch (a chow mix), and spending time with family and friends.
Jonathan Boral

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