Is freezing your credit a good idea?

Identity theft is a major problem today on a global scale.  In response to this problem banks and private companies are creating programs and solutions left and right.  One of the "solutions" is a "credit freeze"  There's a company that even guarantees your identity will not be stolen by using their credit freeze program.  Before you choose this solution you should know the facts.

First of all, financial identity theft is only one of five major identity theft types.  You also have driver's license, medical, social security and character (criminal) identity theft.  What protects your credit will not automatically protect you in other areas.  So when they say they protect your identity, understand that it inly protects one area.

Secondly, what is a credit freeze?  When you freeze your credit you are telling lenders that you are at risk of fraud.  That's not a problem if you are truly at risk and it is a good thing.  But how do you think lenders will view someone who is constantly saying they are a credit risk.  That's all this program is doing, freezing and refreezing your credit.  They also will freeze your child's credit.  So now we have a young adult whose parents enrolled him in this program that reaches adulthood.  When he wishes to get credit, the lenders see a life-long fraud risk.

Lastly, if you feel the need to declare yourself as a fraud risk, you can do it yourself.  There's no law that prevents you from doing so.  A credit freeze is a good idea if you have indications of identity theft and can protect your credit.  After all that is the purpose behind the credit freeze.  But before you enroll in a program that tells you a credit freeze will protect you, weigh the pros and cons.