I want to clear up some misunderstandings about placing a security freeze on your credit report, also called freezing your credit report. Missouri now has a security freeze law.

A security freeze makes your credit report unavailable to those who try to check it -- say to evaluate you for a loan -- without your express permission. It is therefore the most powerful prevention of ID theft. Let's say an identity thief takes your Social Security number and birth date and goes to a bank to take out a loan in your name. Because you have a security freeze, the banker can't see your credit file, and the thief gets rejected. Beautiful.

A security freeze has no effect on the everyday activity on your credit report. When you make your credit card and loan payments (or not), that will still go on your credit report. If you open a new credit card or take out a loan, that will hit your report. You can still check your own credit report three times a year for free using the usual system. It won't stop you from using your credit cards.

It simply stops unauthorized people from opening new accounts in your name.