Credit freezes may help prevent identity theft

SAN FRANCISCO (KGO) -- Credit freezes keep your credit report secret. That can prevent identity thieves from being able to open fake accounts in your name, because creditors usually ask for a credit report before offering services.

Emily Rusch, executive director of the California Public Research Group, said credit freezes are a great consumer tool, but come with a price tag. The three main credit reporting agencies charge $10 to place a freeze on your account, Rusch explained, and another $10 to lift or renew that freeze.

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But soon that will change. In May President Trump signed the Economic Growth, Regulatory Relief and Consumer Protection Act. The law was widely panned by consumer advocates for loosening banking restrictions, but it actually included a consumer perk not many know about: free credit freezes.

"There was one good thing in there", Emily Rusch said. "Equifax, Experian and Transunion can no longer charge you to place or lift a freeze on your account."

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The downside? There are some loopholes in these freezes. A freeze only applies to new credit accounts and doesn't apply to insurance or employment checks. So with a freeze in place, not as many people can see your credit report, but some still can.

The credit reporting agencies have until around September 24 to offer free freezes. Equifax has actually offered free freezes since they were hacked. They said they'll continue offering the post-hack freeze until the new government-mandated freeze is put into effect.

Click here for a look at more stories by Michael Finney and 7 On Your Side.