Should You Pay For Credit Protection,

Recent headlines about data breaches and losses of personal information have prompted many companies to advertise products or services to help consumers prevent or minimize their risk of identity theft. The Federal Trade Commission (FTC), the nation's consumer protection agency, says before you pay for an identity theft prevention product or service, make sure you understand exactly what you're paying for.

Many people find value and convenience in paying an outside party to help them exercise their rights and protect their information. At the same time, some rights and protections you have under federal or state laws can help you protect your identity and recover from identity theft at no cost.

Knowing and understanding your rights can help you determine whether - or which - commercial products or services may be appropriate for you. Fraud alerts may be effective at stopping someone from opening new credit accounts in your name, but they may not prevent the misuse of your existing accounts.

Under the federal Fair Credit Reporting Act (FCRA), you may be entitled to two kinds of free fraud alerts: initial and extended. You may ask a consumer reporting company to place an initial fraud alert on your credit report if you suspect you have been, or are about to be, a victim of identity theft.

This may be appropriate after your wallet or another source of personal information is lost or stolen. An initial fraud alert is good for 90 days, and can be renewed when appropriate. To place an initial fraud alert, call the toll-free fraud number of any one of the three national consumer reporting companies. The company you call is required to contact the other two; they, in turn, will place an alert on their versions of your report. Expect to receive a confirmation from each of the companies.

If you have been a victim of identity theft, you may ask for an extended alert, which stays on your credit report for seven years. If your credit report has an extended alert, potential creditors must contact you in person, or by phone or some other method you have provided before they can issue credit in your name. When you place an extended alert on your credit report, you're entitled to two free credit reports from each of the consumer reporting companies within 12 months.

In addition, the consumer reporting companies must remove your name from marketing lists for pre-screened offers of credit for five years - unless you ask them to put your name back on the list. A credit freeze allows you to 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.

Limiting access to your credit report makes it more difficult for identity thieves to open new accounts in your name. That's because most creditors will need to view a credit file before opening a new account; if they can't see the file, they may not extend the credit. Still, a credit freeze may not prevent the misuse of your existing accounts or certain other types of identity theft. A credit freeze is different from a fraud alert in a number of ways.

A freeze generally stops all access to your credit report, while 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 consumers who believe they may have been, or actually have been, victims of identity theft.

And some states charge a fee for placing or removing a freeze, although it is free to place or remove a fraud alert. Most states have laws that allow consumers to place a credit freeze with consumer reporting companies. In many of these states, any consumer can freeze their credit file; in others, only identity theft victims can freeze their files.

The cost of placing a credit freeze and the lead times vary. 10 per credit reporting company. Contact your state attorney general for the particulars of your state's freeze laws. To place a freeze, contact each of the nationwide consumer reporting companies because a credit freeze placed at one company is not referred to the other companies.



And be aware that the three major credit reporting companies have begun offering credit freezes directly to consumers - for a fee - regardless of whether their state has a freeze law. Placing a credit freeze does not affect your credit score, keep you from getting your free annual credit report, or keep you from buying your credit report or score. It doesn't prevent you from opening a new account yourself, applying for a job, renting an apartment, or buying insurance, either.