R2I Finances - Options to Protect Credit

Those with a few years of residence in the US understand the value of building credit and having a stellar credit report. A good credit score makes it easier to attain credit, mortgages, loans, etc., and that too at better rates. For R2Iers, there are a couple of choices to protect the credit built up:

  1. Fraud Alerts: This allows placing an electronic red flag in the credit report – lenders are required to take steps to verify the identity of the person applying for credit in your name although the exact steps required are not spelled out. The good things about fraud alerts are that it only requires a phone call and the service is free of cost. However its ability to protect credit against identity thieves is questionable – since the identity verification steps are not spelled out, lenders can choose to ignore the alert completely, thereby compromising the purpose of the alert.
  2. Credit Freeze: Credit Freeze allows blocking credit reports – this prevents identity thefts by not allowing thieves to open a new credit account or secure a loan under your name. When a freeze is in place, opening an account in your name is not allowed. Since the credit file is locked, it translates to background checks not allowed. The owner is blocked as well unless the freeze is lifted using a pin. A confusing aspect for many is that freezing credit does not restrict one from using the credit already allotted. Further, credit freeze does not affect existing lenders access to the credit report. In short, credit freezes are the most effective way to prevent identity theft. The fee was $10 per agency and a pin and advance notice was required to be able to lift the freeze (15 minutes to 10 days depending on the state). Fee waivers apply in certain states, for a senior citizen or for a victim of identity theft. To temporarily lift and reinstate a freeze, the fee was between $10 and $12.

We opted for Credit Freeze, as our intention was not to apply for credit in the US for a while. Below is our experience doing this with the three major credit agencies:
  1. Equifax (Equifax Security Freeze, P.O. Box 105788, Atlanta, GA 30348. PH: 1-800-685-1111): Equifax online process was by far the easiest. The three steps involved with this online interface are:  personal info (name, DOB, ss#, address, old address), type of freeze, and payment ($10 - credit card options). Once the steps were completed, the interface returned with a pdf document confirming the freeze - Painless! The pdf doc contained the PIN required to temporarily or permanently lift the freeze
  2. Trans Union (Trans Union Security Freeze, P. O. Box 6790, Fullerton, CA 92834-6790. PH: 1-888-909-8872): Trans Union’s interface was a combination of the free annual credit report interface and the account freeze interface and thus less intuitive. Nevertheless it worked. The interface transfers to an account login for the free annual credit report. There is also the need to accept two template agreements. It then came back with a payment screen ($10 - credit card and address), and finished with a ‘Create Security Pin’ screen – the security pin needs to be memorized for use when lifting the freeze at a later time.
  3. Experian (Experian Security Freeze, P. O. Box 9554, Allen, TX 75013. PH: 1-888-397-3742): Experian’s online interface did not function for us. The interface took us to a set of links from which the freeze link can be chosen. Entered the personal info (name, address, DOB, ss#), the payment screen (credit card), and the identity verification segment with 5 questions. It returned with a screen that said ‘could not charge to credit card’. On the second attempt it said system error and to try again later. At last effort a different credit card was used - it went through but came back with a blank screen. We pursued the more involved mail-in option. It required submitting supporting documents – government photo ID, utility bill, along with personal info (name, address, old address, ss#, DOB) and the $10 check. Received an acknowledgment after two to three weeks with a PIN/confirmation number. That number is needed to lift the freeze.

Before going through this process of freezing credit, it is vital to check the existing credit reports to ensure there are no errors. This can be done very easily online and free of cost at the government website AnnualCreditReport.com, if accessing the website from within US. Otherwise only mail-in option is possible (details at www.ftc.gov). Hence, it is best to get this process done while still in the US.


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