The potential for becoming a victim of identity theft is greater than ever before; in fact, some figures estimate that as many as 15 million Americans personally experience some form of this crime each year. Cleaning up the mess that comes along with identity theft is likely to be a lengthy, troublesome process.

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From calling the companies where the fraud occurred to placing a fraud alert on your credit report, you’re bound to spend an inordinate amount of time on the phone in an attempt to get your money back and get your credit report to return to normal. Luckily, there’s a way to prevent going through this hassle.

A simple tool called a credit report freeze can save you the headache of dealing with identity theft by potentially stopping it from happening altogether. Read on to find out more about a credit report freeze and why you need one.

What is a credit report freeze?

A credit report freeze allows you to restrict lenders and credit card companies from accessing your credit information. This helps to stop identity theft because it prevents anyone from accessing your credit during the loan or credit card application process until you lift the freeze.

For example, if an identity thief submits a credit card application using your social security number, the credit card company will most likely try to access your credit report to gauge how likely you are to make your monthly payments. If you have a credit freeze in place, they won’t be able to access that information and will in turn deny the identity thief’s application.

When you have a credit freeze in place, there are still a couple of situations in which your credit report may be accessed. Your existing creditors or their debt collectors can still access the information, as can government agencies who have received authorization from a court order, subpoena, or search warrant.

However, since these companies and agencies aren’t associated with opening new lines of credit under your name, you don’t have to worry about identity theft in these situations.

Why should you freeze your credit report?

Freezing your credit report is a smart move because it offers credit protection even if your personal information has been compromised. That being said, you should consider freezing your report even if you’re not aware of your personal information being stolen.

It’s an easy step to take care of in advance of potential identity theft and is important to do because you may not even know that your information has been stolen.

Major companies around the world are constantly being attacked by hackers in an attempt to steal credit card numbers, social security numbers, and other personal information. To make matters worse, they may not even know about the compromised information until well after the attack has happened.

For example, 80 million members and employees of health insurance company Anthem had their social security numbers stolen in early December 2014.

However, Anthem didn’t even realize the breach had occurred until late January of 2015 and didn’t make any announcements for another week. That’s nearly two months where millions of consumers’ credit was available to identity thieves without them even knowing it.

While Anthem eventually offered credit monitoring services to members, having a simple credit freeze in place would provide an additional level of security, particularly during those first two months of ignorance.

Will your credit score be affected by a credit report freeze?

Implementing a credit freeze does not affect your credit whatsoever. In fact, the only effect that it has on your credit report or score is keeping them both in tact against potential threats from identity thieves.

A credit freeze also doesn’t prevent you from receiving your free annual credit report from each of the consumer reporting agencies so you can still request that information each year through AnnualCreditReport.com. You’ll also still receive prescreened credit offers when you have a credit freeze in place, however you can still opt out of those.

Another important point to note is that a credit freeze only restricts lenders’ access to your credit report. It does not in any way monitor your bank or credit card activity, so you still need to keep an eye on those transactions to make sure there is no suspicious activity.

Many banks will often set up alerts to detect odd spending patterns in your accounts, but you shouldn’t strictly rely on them to keep track of your money. Identity thieves opening new accounts and using current accounts are two separate crimes and therefore must be monitored and treated differently.

How much does it cost to freeze your credit report?

The cost of a credit report freeze depends on a few different things but is generally decided by the state in which you live. If you’ve already been the victim of identity theft, then the freeze is usually free.

Many states also offer this service for free to seniors over 65 years old. Otherwise, the costs typically range between $3 and $10. Unfortunately, you have to pay the fee for each individual consumer reporting agency, so realistically the total fees can range anywhere between $9 and $30.

You’ll also be charged fees for lifting the freezes, either temporarily or permanently. These costs range from $2 to $10 for each agency. It may seem like the expenses associated with a credit freeze could add up quickly. But in reality, they are quite minimal considering the time and cost of recovering misused funds and repairing your credit that has been hijacked by an identity thief.

How do you unfreeze your credit report?

There are two ways to lift a credit freeze: either temporarily or permanently. A temporary lift is used when you’re applying for a loan, a credit card, or even a job that requires an extensive background check. Just be sure to plan in advance because it can take up to three business days after you submit the request for the agency to actually lift the freeze.

To save yourself a bit of time and money, you can ask the lender or potential employer which credit reporting agency they plan on contacting and then you can just lift that one specific credit freeze.

A permanent lift, as the name indicates, entirely removes the credit freeze from your credit report. Whichever option you choose, you’ll need your PIN, which you’ll have received in a confirmation letter when the freeze was initially put into place. You’ll have separate PINs for each consumer reporting agency so be sure to place all three in a secure location.

What happens if you lose your security PIN?

If you lose or misplace your security PIN for one (or all) of the reporting agencies, you’ll need to individually contact each one in writing. Along with your request, be sure to send a copy of your proof of identification, such as your driver’s license, birth certificate, or passport. There will likely be a fee assessed for sending you a new PIN, typically ranging between $5 and $10 depending on your state.

What other things can you do to prevent identity theft?

Remember that there are three types of identity theft as categorized by the Bureau of Justice: the unauthorized use of an existing account; the unauthorized use of personal information to open a new account; and the misuse of personal information for fraudulent purposes. Attempts at any of these actions also constitute fraud.

In addition to implementing a credit report freeze, there are a few other proactive ways to prevent identity theft. The first is placing a fraud alert on your credit report. A fraud alert requires credit companies to verify your identity before offering any credit. To do this, the company will try to get in touch with you so make sure your contact information is up to date.

You only have to request a fraud alert from one consumer reporting agency, and then that agency will notify the other two of your request. Fraud alerts are free for 90 days and can be renewed.

Another option is to sign up for a credit monitoring service, which can track your credit activity, notify you of any changes to your credit score, or potentially both. The exact services and costs vary depending on the company you select so do your research before choosing one. To help you out, we’ve created a roundup of the best credit monitoring services for 2016.

Identity theft has unfortunately become a common occurrence in the modern world, and it’s becoming more and more likely that you’ll be affected by this criminal practice at some point in your life.

Protect your finances by taking proactive steps to fight against becoming a victim. While there are plenty of products and services available today, implementing a credit freeze is a simple, low-cost solution to prevent identity thieves from opening new accounts with your personal information.