Recently TransUnion and Equifax, two of the three credit bureaus, have announced that they will allow consumers to freeze credit reports and scores in all U.S. states. There are hopes that Experian will soon follow. However, freezing credit prevents most lenders from distributing new credit to the consumer because this information is necessary in the lending process.

Consumers who decide to freeze credit will use a PIN number to access their files to continue to apply for new credit. But if you are not an identity theft victim, you could be subject to paying up to ten dollars for freezing or unfreezing credit in most states. A few states allow consumers to be charged regardless of their previous encounters with identity theft. For those who pay the $14.95 a month for TransUnion’s credit monitoring service will also receive the credit freeze service free. Equifax, being the most recent credit bureau to allow freezes, has yet to delineate its credit freeze services.

Do not make the mistake that a credit freeze will exempt you from identity thieves. It only helps to lower the risk of identity theft. A freeze is more effective in identity theft prevention if it is combined with other established methods of prevention than standing on its own.

To further prevent identity theft, consumers must shred all materials before discarding them. Studies have shown that thieves more often follow paper trails of documents that have not been shredded than they are to hack into a credit file. It is best to sign up for online accounts, automatic or online bill payments and money transfers and employer direct deposits to avoid the paper trail altogether. This can not only help prevent identity theft but saves paper. When signing up for such online sites, be sure to choose a provider that is safe and consolidates confidential material, like a financial institution.

Furthermore, lost or stolen items from purses, wallets, or mailboxes can aid a thief in stealing your identity. This is why you should never keep your Social Security card or number in your wallet as well as account numbers. If you have had your Social Security card stolen and need it re-mailed to you, use a P.O. Box or other boxes to where only you have access.

Also be aware that some cases of identity theft are not visible through credit reports, but rather as other types of fraud such as medical or government benefit fraud, employment fraud or non-financial criminal usage.

Identity theft is a real and pervasive crime. Last year alone there were 15 million identity theft victims. Taking precautions over sensitive information is a good start in protecting your identity. Save yourself hundreds of hours and dollars now by taking the time to understand this crime and prevent it from happening to you.