TransUnion to Offer Credit Freezes Nationwide 174
An anonymous reader writes "In a little-noticed press release issued Tuesday, credit reporting bureau TransUnion said it would begin offering credit freezes to all Americans, a change the belies the credit industry's oft-uttered claim that doing so would be too expensive and burdensome. The program takes effect Oct. 15, 2007, will cost $10 each to place and to remove, and request and must be filed by certified mail. As The Washington Post reports, the move comes as some 39 states and the District of Columbia have passed laws entitling their residents to credit freeze rights. The new right may have little benefit unless the other two major credit reporting bureaus follow suit, and both companies are staying mum about any plans to do so. In May, Slashdot examined a related story on the credit bureaus' traditional resistance to freeze laws."
Re:Too lazy... (Score:5, Informative)
Re:Confused... (Score:4, Informative)
Re:Confused... (Score:5, Informative)
2) My history is frozen
3) ???
4) profit
3a) identity thief attempts to open an account in my name
3b) identity thief fails to guess the secret password needed to mail in and unlock my account
3c) identity thief's credit line is denied.
3d) my credit record is safe, allowing me to unlock the credit when I actually do need it and...
In simple terms, it makes sure nobody else can attach lines of credit to you. The credit bureaus hate this because every time someone verifies your credit, they make $50 or so, which means that they have a financial interest in making sure as many people as possible can access your credit as often as possible. If they only made money when people were legitimately applying for a credit card or a mortgage, they'd never be able to pay their CEO the millions of dollars he deserves.
Re:Confused... (Score:3, Informative)
Re:The Problem with credit freezes (Score:5, Informative)
I do take issue with the benefit of keeping the credit limit low. A potential lender may see larger limits and take that as a sign that other lenders feel comfortable extending credit to you. This is reflected in how the score is calculated. I use Experian's site regularly because I have free access due to my previous job (employer exposed employee data so they bought us all full access). There is a section where you can modify a number of the factors that affect your credit score and see what your score would be with the modified factors. Raising your limits on your credit cards accounts can improve your score. What will harm your score is having a low total percentage of credit available. For example if you have a balance of $400 on credit cards with a total limit of $500 between your credit cards, you will only have 20% of your credit available. This will negatively affect your credit score. If you have a $10,000 total limit with the same $400 balance, your percent of available credit is close to 100% and your score with be much higher.
Re:Confused... (Score:4, Informative)
Re:It goes deeper than that (Score:5, Informative)
I frequently read through CreditBoards, and while having a lot of available credit could conceivably hurt you, actually being denied for having too much credit is pretty rare and seems to only apply to mortgages. In this case, the loan officer will instruct you to close some tradelines before they will proceed. This practice hardly seem predatory, especially given the multitude of other huge problems with the CRA system.
Re:Experian won't answer its phone. (Score:3, Informative)
I had a case of ID theft, filed a police report and everything. Experian kept telling me I wasn't me.
Equifax and TransUnion had no problems.
Experian are a bunch of asshats.
Re:Experian won't answer its phone. (Score:5, Informative)
Send everything in writing and send it certified mail return receipt, yes it is a pain but when the time comes to the the CRA to small claims court you have everything you need.
Re:So much fuss, so little problem. (Score:3, Informative)
Funny thing that. It is.
Re:It goes deeper than that (Score:2, Informative)
Re:It goes deeper than that (Score:4, Informative)
You may have problem only if your total amount of credit starts to exceed your possible income. But in that case you don't really need another credit card anyways (though it may have implications for getting a different type of credit such as mortgage etc)
But yes, credit companies love to extend the credit to "not credit worthy" because there is a better chance of getting fees/interest payments/etc.
Of course it's more fun to think that all of the free credit increases you get are just companies trying to "get you". But it's sorta like believing that cities that provide water service do it so they can put "evil drugs" in the water. And electric companies transmit through the power lines hidden mind control signals.
If credit card is really interested in screwing you, they wouldn't increase your credit line. Instead they'd report to credit agencies that you were late with your payment 3 times by more than 30 days, which'll put your rating in the toilet so much faster.
Re:It goes deeper than that (Score:2, Informative)
It goes deeper than that. Companies you have credit with will extend you more credit than you think you have (often in the form of higher limits) not just because they like you, but because it can actually lower your credit score by making you more "at risk" for being in debt because you have access to credit.
This is a common misconception regarding credit limits. larger credit lines do not decrease credit scores. An increased credit line decreases a) credit utilization for that specific credit line and b) overall credit utilization. - Two of the primary determinants of credit scores. (of course, this assumes that when the individual is offered more credit the individual does not run up more charges...)
Educate Yourself (Score:5, Informative)
First, there was a lot of corporate pressure for Employees to invest all their 401k allocation in company stock. This was pushed by the HR department as well as the C-level managers at corporate pep rallies. Second, Enron stock was GOING THRU THE ROOF. It was EXPLODING. You're sitting there, in the middle of the 90s boom, and you're seeing your co-workers dumping the max federal limit into their 401k's, every dime of it into company stock, you see the internal view of the company, flush with cash and growing like crazy, and you see those co-workers becoming MILLIONAIRES before your eyes. So you invest your 401k into Enron stock and get your boarding pass to the gravy train.
Still, I can level with you that personal greed (however understandable) is what put them in that position. However, there's a whole lot of people who never really had a choice. PG&E was bought on the cheap and integrated them with the rest of the Enron West Cost energy assets. PG&E had an internal stock ownership program: employees were granted shares of the company. Lifelong employees had loads of stock in a company that had been local, with a solid business, for decades. This was their nest egg.
When Enron bought them, they swapped PG&E shares for Enron shares. No doubt many of these employees were excited to see that, considering how Enrons stock was still going strong. But these are people who never really had a choice. They lost everything. And the very worst part of that story is that a Federal Bankruptcy Judge injuncted those employees from selling the stock. Enrons share price didn't collapse overnight. It took some time to unpeel that onion. At the same time, executives like Lou Pai were selling millions (even Hundreds of Millions) of dollars in Enron stock, these poor bastards who worked 40 years as linemen or plant operators were forced to just sit by and watch the stock price plunge.
This was an absolute tragedy. These people were just bent over and fucked over and over by the company AND the government. You really should educate yourself before you speak.
Re:Confused... (Score:3, Informative)
Re:Confused... (Score:2, Informative)
Basically, this service allows you to selectively decide whether you want somebody to pull your Experian report. Your report is typically pulled when applying for new credit, undergoing background checks, apply for insurance, marketers looking for candidates to send Balance-Transfer offers, etc.
It does not affect existing creditors - they are allowed to keep pulling soft reports for account reviews, etc.
One caveat to this is that a freeze does not prevent one (or a thief) from requesting a credit limit increase on a tradeline. Of course, if a thief is requesting the CLI, they then have to go further and avoid activity that is out-of-character for your account history and/or the credit grantor has determined to be a fraudalent pattern or activity.
The other reason why freezes are used is when your Experian report is worse, has more hard inquiries, or has derogatory info (or more so) compared to the other 2 bureaus. Experian is quite tough about removing derogs, hard inquiries, or incorrect info, and many credit applicants find it more beneficial if a credit grantor pulls their TransUnion or Equifax reports. Oftentimes, a credit analyst will call and ask that you unfreeze your report. You can do so, or request that they pull your TransUnion or Equifax reports instead. Some will, some won't. The ones that won't will insist on pulling your Experian report, or deny your application if you refuse to thaw it.
Besides, as a another poster has stated, depending on your state, you can thaw a report, let a credit grantor pull your report, and then refreeze it the same day.
Like it or not, knowledge about credit is usually the one factor you can control that determines your success in your personal life and business. From what I've read on this thread, most slashdotters are pretty ignorant about credit and how it be useful for their goals.
Everybody on this board should visit www.creditboards.com/forums and become more educated about the credit process rather than perpetuating false info and myths about credit.