You've got a lot on your mind. It costs $80 to fill up your gas tank, you haven't saved anything for retirement, and your water heater is making strange burbling noises. The last thing you need to worry about is whether some crook in Belarus has hijacked your good credit.
That's not a farfetched concern. Last month, the U.S. Department of Justice charged 11 people in five countries in connection with the cybertheft of millions of credit and debit card numbers. The account numbers belonged to customers of nine major U.S. retailers, including Barnes and Noble, BJ's Wholesale Club and T.J. Maxx. The numbers were stored on computer servers in the USA and Eastern Europe and sold through the Internet to other criminals, the charges allege.
The good news? The most potent weapon against identity theft is becoming easier to use. Cheaper, too.
That weapon is the credit freeze, also known as a security freeze. When you place a freeze on your credit reports, credit card issuers, lenders and others can't check your credit history. Without that information, they won't issue credit. And that also means criminals can't set up new accounts in your name.
That's increasingly important, because new-account fraud is one of the most pernicious forms of identity theft. If someone uses your credit card number to buy, say, designer shoes online, you can dispute the charges when you receive your credit card bill. In new-account fraud, though, criminals use stolen information to open accounts in your name. Sometimes, they arrange for the bills to go to a different address. You might not realize you've been victimized until the unpaid bills have trashed your credit record.
A credit freeze will protect you from new-account fraud, but it has a downside: If you want to apply for a mortgage, car loan or credit card, you'll need to contact all three of the main credit bureaus — TransUnion, Experian and Equifax — and unfreeze your credit reports. Most states give the credit bureaus three business days to temporarily lift or remove the freeze, a problem if you're in a hurry to get a loan.
But, under laws that took effect Sept. 1, residents of Arizona, Idaho, New Mexico, Utah, Wyoming, and Washington, D.C., can lift or remove a credit freeze in 15 minutes, using a personal identification number, according to Consumers Union. And starting in January, the 15-minute provision will extend to Indiana, Maryland, Montana, Nebraska and Tennessee.
Consumers Union hopes all 50 states will eventually adopt the provision, spokesman Michael McCauley says. "Clearly, the credit bureaus have the technical capability to lift the freeze quickly," he says.
Though a faster thaw will eliminate one of the drawbacks to the credit freeze, there are other issues to consider, too, including:
•Cost. The price of putting a freeze on your credit report ranges from nothing to $10, depending on where you live. You might also have to pay a fee to suspend or end the freeze.
In Nevada, for example, residents must pay $15 to implement the freeze and $18 to suspend or eliminate it. In Georgia, imposing, lifting or removing a freeze costs $3. Most states waive fees for victims of identity theft, and some waive them for senior citizens.
The fees apply to each credit bureau. So depending on where you live, it could cost you $30 or more to freeze all three of your credit reports. For that reason, a credit freeze might be most appropriate for consumers who don't plan to apply for new credit in the near future.
Currently, TransUnion is waiving fees for consumers who go online to freeze their credit reports, spokesman Steven Katz says. People who freeze their credit by phone or mail, he says, will pay the fees applicable to their state. TransUnion might impose fees for the online credit freeze in the future, Katz says.
•Confusion. When you place a fraud alert on your credit report, you have to contact only one credit bureau, and it will alert the two others. This isn't the case with a credit freeze. You must contact all three credit bureaus — either online, by phone or through the mail — to impose or lift a credit freeze. You can find more information on their websites: www.experian.com, www.transunion.com and www.equifax.com.
The patchwork of state laws can seem bewildering. Though credit freezes are administered by the credit bureaus, the laws governing them are determined by the states.
Consumers Union offers links to each state's credit freeze laws at www.financialprivacynow.org.
Sandra Block covers personal finance for USA TODAY and is a co-author of 'The Busy Family's Guide to Money.' Her Your Money column appears Tuesdays. Click here for an index of Your Money columns. E-mail her at: firstname.lastname@example.org.