Definition

• A credit freeze is a procedure that restricts access to your Equifax, TransUnion and Experian credit bureau files. Creditors cannot view the files to process applications unless you temporarily "thaw" them with a special password or personal identification number, the Clark Howard consumer information website explains. Everyone in the United States is allowed to freeze their credit files, although state regulations on costs vary.
  
  

Purpose

• A credit freeze protects you from fraudulent use of your credit reports. Fraud alerts, which are placed after an identity theft breech, also provide some protection, but they are a reactive measure. You place them after you are victimized, and they only last for 90 days unless you file a police report and ask for a seven-year extension, according to the Federal Trade Commission. USA Today "Your Money" columnist Sandra Block explains that freezes offer more protection because they block credit report access. Fraud alerts only require creditors to call you before approving applications to verify your identity.
  
  

Cost

• The credit bureaus are allowed to charge consumers fees that generally run between $3 and $10 for credit freezes, as well as thaw fees. In South Carolina, a law that went into effect on December 31, 2008, prevents TransUnion, Equifax and Experian from charging the state's residents for freezes and temporary or permanent thaws. Freezes must be done and undone separately with each bureau. For example, if you place a freeze with TransUnion, your Equifax and Experian files are still unprotected until you contact those two bureaus.
  
  

Process

• South Carolina residents must contact each credit bureau separately to place freezes. TransUnion, Equifax and Experian all need a letter that includes your name and any aliases, your current and recent addresses, birth date and Social Security number, according to Consumers Union. You must include a copy of government issued identification, like your South Carolina drivers license or a military card, to prove your identity. The freeze goes into effect within five days, and you get your password for thawing credit temporarily within 10 days.