PORTLAND, Maine — If an identity thief applied for credit in your name, they’d need a heap of your information, along with what the real you would need: a credit check.
That’s where a new state law hopes to curb fraud. This month, Maine became one of a handful of states that lets residents freeze their files from new credit check requests — for free.
Getting a credit freeze may pose a challenge if you expect to tap into credit lines for a mortgage, car or even a new cellphone plan in the near future, but it frees up a new method of identity security that previously cost up to $10 — times three, for each major credit reporting agency — every time a credit file was frozen or unfrozen.
The new law took effect Oct. 15.
Will Lund, superintendent of Maine’s Credit Protection Bureau, said the new law could be valuable as recent data breaches have shown there’s real risk in keeping the right heaps of information out of the wrong hands.
The credit reporting agency Experian earlier this month reported a data breach affecting an estimated 15 million people who applied for T-Mobile service in the past two years.
The scale and nature of that breach, Lund said, “shows that there is no such thing as a system that is completely unbreachable.”
To date, however, that hasn’t been the primary threat.
Lund said someone close to the victim is most often the culprit in cases of identity theft. With that in mind, the new law also allows certain representatives of people younger than 16, who may have no credit record, to seek a freeze on credit requests in their name, which may be subject to a charge of up to $10 per request.
A credit freeze prevents new companies or individuals from accessing a credit report, while still allowing access for existing creditors, debt collectors or government agencies. Limiting access to that credit report makes issuance of a new line of credit in your name less likely.
Lund said residents best positioned to consider a free credit freeze under the new law fall into three general groups:
— People who don’t have immediate or substantial credit needs — i.e. people who have already purchased homes, cars and who don’t plan on applying for department store credit cards on a whim.
— People who are generally concerned about privacy and security and willing to take on the additional planning and care required to freeze or unfreeze their credit scores for new credit checks — this happens more often than you might think, like when applying for a job, renting an apartment or buying insurance, in addition to signing up for a new phone plan or buying a car or house.
— Past victims of identity theft who aren’t able to freeze or unfreeze their credit files for free.
State law requires a credit reporting agency to act within three business days to unfreeze a credit file and within five days to freeze a credit file.
Once a request is made, the credit agency provides a personal identification number within two weeks that is then used to freeze or unfreeze a file. Lund said those requesting a credit freeze under the new Maine law should take care in storing that number, as it’s a passcode used less frequently than others. On top of that, the process for replacing a PIN could cause complications when a credit check is needed.
“These issues come in very time-sensitive situations,” Lund said, during mortgage closings, car sales or insurance changes.
The new law allows people who have requested a credit freeze to have the freeze temporarily removed later for specific people or companies or for a specific period of time.
Those options could depend on the situation, Lund said. If a person is seeking to buy a car from a specific dealer, it may make sense to ask the dealer which credit reporting agency or agencies they use. Getting the appropriate access may only require one call and not three to each credit reporting agency.
If a person knows they’ll be shopping at various dealerships, Lund said it may make sense to get a general lift on the freeze for a period of time.
The new law allows customers to request a credit freeze from all three major credit reporting agencies — Equifax (800-349-9960), Experian (888-397-3742) and TransUnion (888-909-8872) — online, by mail or through an automated process by telephone.
Such a freeze will not prevent certain companies from making checks to pre-approve customers for lines of credit, Lund noted, but people can make a request to stop getting prescreened offers of credit online or by calling 888-567-8688.
The freeze also is different from credit monitoring or fraud alerts, which warn consumers of suspicious activity but do not necessarily block access to credit report information.
Consumers can regularly check their own credit reports for free, at annualcreditreport.com.