Today I learned about a service called a “credit freeze“. Basically, for a small fee, you can cause the big three credit reporting companies to prevent any new credit being issued in your name without your express authorization.

In North Carolina this was enacted in 2005 and the Attorney General has a nice document (PDF) about it on the DOJ website.

I’m pretty much a security nut, so the idea of a credit freeze is appealing. Here’s our plan:

I went to www.optoutprescreen.com to stop any new offers coming in the mail. This I hope will both reduce the amount of junk mail offers I receive and prohibit someone from stealing my identity through one of these offers.

Then I went to www.annualcreditreport.com and requested a report from Equifax, TransUnion and Experian. The process takes about 20-30 minutes, as as I was asked for a lot of personal information to verify my identity as well as being prompted for some non-free services such as my credit score. Andrea will do the same thing.

We’ll review the information and close any really old or unused accounts. I don’t want to close all of them, because one thing lenders look for is your debt to credit ratio, which is the amount of credit you have versus the amount you use. So a guy with a $20K on a credit line of $100K will sometimes look better than a guy with $1K on a credit line of $2K. But I really want to limit the number of accounts out there since I plan to keep an eye on them.

Finally we’ll spend the $60 (2 people x 3 credit reporting services x $10) to get our credit frozen. We have enough credit for now, so I don’t expect it to be a problem, and the upside is a serious reduction in the chance that someone could steal our identities.