Transcripts

"Money File"-Credit Report Protection

SUSIE GHARIB: In the "money file" tonight, is freezing your credit report the right move? Here`s some answers from Terri Cullen, personal finance columnist at the "Wall Street Journal online."

TERRI CULLEN, PERSONAL FINANCE COLUMNIST, THE WALL STREET JOURNAL ONLINE: All consumers will soon be able to freeze their credit reports to help prevent identity theft. Previously, the three major credit bureaus -- Equifax, Transunion, Experian -- generally extended this privilege only to identity theft victims and residents of states that required it by law. When you freeze a credit report, lenders and others can`t see your file until you ask the credit reporting agencies to thaw or open, it. That means you and a potential identity thief, can`t open a line of credit in your name until the credit bureaus have your written permission. Transunion will be the first to offer security freezes nationwide starting on October 15 and Equifax said it would offer freezes by the end of this month. Experian announced this week that it will make the freeze available to all on November 1.

Consumer advocates applaud the decision to offer freezes nationally. But lenders, retailers and others say there are easier ways to prevent fraud without forcing consumers to contact all three agencies every time they want to open a credit line. Then, there are the fees. It generally costs $10 to initiate a freeze on one credit report and another $10 to thaw it, though some states do require lower fees. The average couple would have to pay $180 to freeze their files and then thaw them when they need to obtain credit. Is a freeze right for you? Generally, it`s a good idea. A security freeze provides a strong layer of protection against identity theft. If you`re planning on opening a line of credit soon, or it`s likely a potential employer might need to access your credit reports, hold off for now to avoid the fees and hassles of placing and remove the freeze. I`m Terri Cullen.