Freezing your credit is now free in all states under a new law
usatoday.com
usatoday.com
Since the freeze I've opened up a few lines of credit (loans, credit cards, etc). It's not that painful. Most of the time you just find out which credit bureau(s) they're going to pull from beforehand, do a temp unfreeze, and then submit your application like normal. It takes a few extra minutes of your time, but is otherwise not a bother.
There have been a few instances where the companies I was working with were just ... incompetent and didn't know who they were going to pull their reports from. Yeah ... but in those cases I just submitted the application and waited for the rejection letters to roll in, which state which company reported a 0 credit score :P
Is it as easy as before? No. But how often do you open lines of credit or bank accounts? Not often. And I don't think doing those things should be easy anyway. The huge plus here is that you don't have to worry about identity theft like everyone else. I've seen too many friends and family go through identity theft now. It's horrific, stressful, time consuming, and seemingly endless.
And on the bright side, I think having your credit frozen is becoming more and more common, which means companies are getting more used to dealing with people who have them. So the process is becoming more streamlined over time.
Now the caveats. Yes, it cost me money. It may still cost money even with this new law; as a fellow comment points out you may still have to pay whenever you need to temporarily unfreeze your credit. And yes, it's a racket. In many ways it feels like a shakedown. But such is life. People cheat you out of your money every day. This wasn't a mountain I was willing to die on.
The more you let this kind of thing be pushed into your lap, the more it will be.
You're correct that this isn't your problem, and eventually you'll get your money back. You're wrong with idea that you can be passive and not get screwed.
Freezing credit also may lead to people less likely to open up lines of credit as well. I got a credit card request for temp unfreeze, and I've never gotten around to it.
It's all a matter of reducing attack vectors. I can put a firewall on my network, but that doesn't mean I don't also need smart passwords.
The kind of identity theft involving use of a credit report (as opposed to a stolen bank instrument) is relatively rare. Most identity theft involves a stolen credit card and freezing one's credit report offers no benefit in that scenario.
I am absolutely not wrong, the vast majority of people take a passive approach and are fine.
I don't know why you're talking about "getting your money back," this kind of fraud doesn't involve any loss of money from anyone other than a bank. There is no way at all that I can put my own money at risk by not freezing my credit. No one is talking about totally ignoring fraud and allowing a default judgement to occur -- I am talking about not paying upfront fees to micromanage access to pull credit.
It does not matter very much at all.
Not correct. If someone opens a credit card (or anything else at that bank) in your name, and rings up a large balance, you can be sued and levied. It doesn't have to be the same bank; they can and will find your legit accounts in an effort to recover funds. I'm speaking from experience; the actual lawsuit was filed by a law firm that specializes in that type of collection. The protection you get from illegitimate accounts isn't automatic; you'll still have a degree of burden, depending on where you catch things.
You are discussing something entirely different, unrelated to the point I made above.
I'm suggesting you should not pay upfront to help curate this data, to pay to micromanage access to a credit report to protect other lenders.
Freezing a credit report is not going to prevent someone from getting ahold of your information. It will prevent someone who already has your information from running your credit and opening new lines of credit -- which doesn't matter much. It is completely ineffective for the vast majority (90%+) of identity theft.
It will not protect you from someone stealing your cards or checks.
Yes, credit card theft is not a big deal and you don't really need any protection because the CC companies are pretty pro-active about it. That is not what we are talking about. Yes, real identity theft is rare but it does happen. With a few simple steps, you can protect yourself better in the rare case that it does. Can you completely protect yourself? No, but some protection is better than none.
As I said above, it is far, far less time and expense to follow up to actual fraud with a police report than it is to freeze-unfreeze your credit every time you want to pass a credit check.
Unless you need monthly credit checks (very odd), I find that statement extremely hard to believe.
The vast majority of people never freeze their credit and never have to expend any energy on the issue of credit security at all.
Most people have their credit run a few times a year, when they sign up for a new service, new credit product, raise a limit, buy a new vehicle, what have you.
"better safe than sorry" is a stifling maxim to live by.
So personally I feel it better to prevent the whole thing to begin with.
Also I'm not familiar with those free credit monitoring apps, but it seems like in all likelihood a "free" credit monitoring app is going to sell your data...
Define "quicker."
I got the credit monitoring from Exerpan after its data breach.
Since then, I've had my credit run twice. Both times were initiated by me, so I know when it happened. Both times, I received a notification by e-mail SEVEN DAYS later, followed by a text message a day after that.
Seven days is plenty long enough to destroy someone's finances.
Shouldn't the burden of proof be on them to show that you bought the truck? If their negligence actually prevented you from obtaining credit, shouldn't it be easy to get damages in small claims court?
> Unsurprisingly, the bureaus’ use of the term credit lock has confused many consumers; this was almost certainly by design. But here’s one basic fact consumers should keep in mind about these lock services: Unlike freezes, locks are not governed by any law, meaning that the credit bureaus can change the terms of these arrangements when and if it suits them to do so.
https://krebsonsecurity.com/2018/09/credit-freezes-are-free-...
On the other hand if your identity is stolen and your current lines of credit or bank accounts get drained, it's much more difficult to deal with because the money's gone, or there are a bunch of transactions you need to contest individually.
If you lose the paper, you have to go through a manual process to get a new one, the same as you would if you lost the PIN they give you now.
If an attacker has your identity then he might have access to that unlocking process. Thus, how does this strategy changes anything?
Emphasis added. It stops the attackers that don't have this information, thus raising the bar. I'm not trying to invent a perfect system, just a better one that's practical to implement.
The advantages of such a system would give us auditability and revocation, since each access would be tied to a token. Visiting $ISSUER to get a new sheet of codes for fraud would always revoke the previously issued ones. Consequently, from that point, each fraudulently used token could be tracked.
It would also reduce the value of a stolen sheet of one-time codes to an attacker, since they wouldn't know whether using one would trigger an immediate visit from the authorities.
Getting a loan is a significant decision. It's okay to have some circumstance and hassle around it, especially if it can actually provide some security benefits.
Personally, I'd love to see "each credit application must be submitted with a photo and a fingerprint" or even "you must go into some physical office to get verified." Yes, it would be a hassle to get that 90-days-same-as-cash washing machine promo, but if someone claimed identity theft, you've got a thick stack of records designed to make prosecuting the crime easy.
And no, current 2FA doesn't count.
In case anyone hasn't seen this twitter thread before: https://twitter.com/matthewstoller/status/906257077215133696
The history of credit companies like Equifax are extremely dystopian. We should be working to find replacements for such systems.
But until we reduce scarcity to a point where that is possible, presumably lenders need some way to evaluate the "trustworthiness" of who they're lending to, yea? How should it be done? My first thought is an agency like the irs is set up to handle it.
If anything credit agency's actively harm the middle class by allowing people to extract as much money from them as possible via higher prices.
Sure, business loans are very useful but they don't require credit agency's.
If a 2x4 costs $20 and you need 2000 of them to build a house, the house has to cost at least $40,000. And if pieces of siding cost $20 and you need 1000 of them, then that house has to cost $60,000. That's going to be hard to afford out of pocket. You can save the same amount of a mortgage payment every month, but you still need a place to live in the meantime so you're doubling your cost of living until you fork over the $60,000 in cash.
And you might say the cost of a 2x4 would come down too, but if a lumberjack is making $15/hr and makes one 2x4 every hour, then the cost of that 2x4 can only be $5 cheaper before that lumberjack is getting paid more than the value of his work. And you might say the lumberjack could get paid less, but at $15/hr he already needs to work 4,000 hours before he can afford to buy that $60,000 house (assuming no other expenses).
That's two years of savings before he can buy a house, with no money for food, no money for an apartment, no money for a car. If you cut his wages to make the house cheaper, now he has to work longer before he can buy a house. And since no one can afford the house anyway, he'll likely be laid off before he saves enough money because no one can buy the lumber because no one can buy the house built from it.
And of course, this is all ignoring that none of these businesses are making any money in this entire hypothetical situation. If we didn't have home loans, the cost of housing would go down, but it would still be completely unaffordable without a loan even if the builder was losing money.
Further, as the buyer would not have a mortgage they could upgrade from a ‘starter’ home. But, only if they actually felt the need and saved up even more cash.
When I was buying my new house, I found a lender who was willing to write me an interest-only, 105% LTV loan for the new house while I simultaneously had a mortgage on the old property. The premium was only like 1.5%, and I re-financed in a few months after the house sold.
The same way it's done in countries without these entities.
Well, that's kind of, like, their whole job description. If you can't evaluate peoples' trustworthiness, you shouldn't be in the business of professionally loaning money!
[1] https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years
/s?
Let's take a look at what "Identity Theft" actually is.
You go to a bank, give them your property, with the agreement that they will keep it safe and only allow you to access it, in return they get to lend it out and make interest with it.
Then the bank just starts handing your property out to random people. They shrug and go, "Your identity has been stolen, it's your fault, best of luck getting it sorted out."
That's insane. The bank failed to uphold their end of the deal, they failed to keep your property safe and guarantee that only you could access it, they should have to pay to fix their mistake.
If financial institutions were responsible for erroneously dispensing money, establishing lines of credit, etc the incentives would align correctly and this problem would be solved. As long as they are allowed to push this responsibility onto the consumer we will have to keep dealing with a patchwork of locks, freezes, dark-web scans, vigilance in checking your credit report, and even if you do everything right, you will be to blame if a dedicated attacker tricks the bank. It's your fault, no matter how careful and diligent you are, that the bank made a mistake, they have no incentive to make this better.
I have had my identity stolen, I just disputed accounts on my credit report. It took me about an hour. The 3 credit cards companies and two cell companies lost about $25k total. If debt collectors call, tell them to prove the debt which they can't do so they go away.
For you to set up a SECOND FACTOR AUTHENTICATION where you would approve before some new credit account is reported. Maybe even for a credit check.
1. Apply for credit
2. They check your report
3. They make an offer
4. You review the offer
5. You endorse it
6. They submit to bureau
7. Bureau sends you a text
or to their app om your phone
with details of offer
How hard is that??? Seriously!! We have Google Authenticator for bank accounts but not credit bureaus?
It would be strictly opt-in so those who care about identity theft CAN make sure to prevent it.
Phone numbers and cell phones are too easy to have redirected; so an actual cryptographic ID is required. That's why I want the government to sign off on personal IDs when /they/ confirm my ID at drivers/identification license updates.
Yeah, credit will become more expensive, as it should be! People should only lend money with verified collateral etc. And maybe it's not "fair" to lend anyone at the same rate, just as it's not "fair" to have "universal" health insurance. But you know what? F fairness! Nobody needs "fair", we need systems that work, and do so reliably and in easily understandable ways, making the word a place you would want to live in.
We can afford to de-optimize some aspects of the economy in order to get a better quality of life with low stress and all. Equality and anonymity is what everyone needs more of, not "fairness" and invasion of privacy (aka "transparency"), with the former usually used to justify the latter.
People who are against universal health insurance often, I think, imagine spending vast or unlimited amounts should they have a terminal illness. And therefore, they are afraid that society cannot afford to provide that to everyone.
I think that is not a real concern, because the possibilities for treatment are limited in practice sufficiently that universal health insurance is workable. Billionaires do not typically spend all their billions on trying to stave off death.
By contrast, universal availability of credit has no such inherent limit on demand. One person who would otherwise have poor credit could impoverish a nation, in principle, because borrowed money can be utilized for any desire. If we do put limits on the credit provided to people, then we have not changed the nature of it to make it universal and equal and something will be needed to discriminate, even if we don't call it a credit score.
Your hypothetical system makes financial products only available to wealthy. That's pretty much the definition of oppressive. A system where more people have more access to more products is the fairer one.
Debt can be an important tool if used correctly.
Borrow money at 1000% interest
Don't make any payments. What are they going to do? Sue me? I can't pay, I'm in debt. Hookers and blow for everyone.
Borrow more money at 1000% interest. They can't say no!!! Debt for everyone!!
Make Payments? Lol.
Borrow more money. Don't make payments.
Borrow more money. Don't make payments.
Continue on forever. It's a money spigot.
Nobody would be willing to lend to anyone in this situation without serious collateral and only at very high rates and limited to low risk loans.
Reinstituting debtors prison would be the only fix for this problem. And that's 10000 times more oppressive than credit scores.
Don't lend to people in debt? Congratulations, now you're back to credit scores!
It should be the default behavior.
Now the challenging and arguable more difficult thing would be debt collection.
Edit: The short answer is because the consumers are not the customers.
https://krebsonsecurity.com/2018/09/credit-freezes-are-free-...
Freeze page - http://www.nctue.com/Consumers
This is so broken. Freezing your credit at one should automatically freeze your credit at all of them. This functionality already exists for providing a 90 day lock on your profile. Making people jump through 3 sets of hoops to freeze and unfreeze their credit is a joke. I'm guessing this was law makers capitulating to the will of the industry instead of the consumer. Sadly no surprise there.
>"If the credit bureaus cannot sufficiently verify your identity based on the information you've provided, you may need to mail in copies of your driver's license, utility bills or other supporting documentation to validate your identity and execute a freeze."
What constitutes "sufficiently" can be arbitrarily obscure. Examples of this include. The number of a landline you had 20 years ago, the zip code of a company that bought a now defunct company you used to work for. Your only recourse is snail male and making photocopies of sensitive documents and mailing them to a P.O box somewhere. These same "verification" systems also randomly report failure during the process leaving the consumer with no choice but to snail male.
"We want to make it is as simple as possible to access that freeze, but we want to protect you at the same time," Experian's Griffin said. "We need to strike that balance."
This is nonsense and nobody believes this for a minute. This shady industry finally got called to account albeit in a quite limited way and they will do everything possible to make this as inefficient as possible. There may be a law on the books now that they can't charge but there is no law that says these systems need to be maintained, verified to be working or efficient.
I've owned and used bank accounts and credit cards for my entire adult life, that is to say, several decades (in the EU) and I've never come across this concept.
I'll give you a quick summary version based on this though.
Business owners were looking for a way to tell if the person standing in front of them will likely pay them back. So Businesses go to companies like Equifax that try build credit reports on people and basically ask "can I trust john smith?". Essentially they're big time data brokers.
The thing is that when you created and owned accounts with banks and established credit cards, the whole time those banks were funneling your activities to companies like Equifax, who then build these credit reports against you. So even if you never interacted with them, your banks likely told them everything about you.
This kind of thing is something you only really find out about if you go looking for it.
You're right, I don't think I want to go looking into my own reports, until (if ever) I need to.
“Where ignorance is bliss, 'tis folly to be wise.”