Identity theft is a very real concern for many Americans. In fact, a December 2013 Bureau of Justice Statistics bulletin reports that about 7% of people over the age of 16 were identity theft victims in 2012 alone. If you are worried about an identity thief destroying the credit history you've worked so hard to build, there is one measure you can take to protect yourself that may not have occurred to you: freezing your credit file until you need to use it.

Not all identity theft is equally bad
The majority (about 85%) of identity thefts involve fraudulent use of existing accounts, such as using stolen credit card information to make purchases. While these cases can be annoying, the problem can generally be taken care of relatively quickly and at little to no expense to the account holder.

However, cases where a victim's personal information is used to open new accounts are much more complex. This can easily ruin a good credit score, and it can take a long time and cost a lot of money to fully recover.

A lot of consumers may be especially vulnerable to identity theft. Were you possibly involved in one of the infamous data breaches that occurred over the past few years? Have you used a computer without updated Internet security software? Or, do you simply have too much to lose by having your identity stolen?

Freezing your credit is not just for victims
A common misconception is that a credit freeze is something you do after your identity is stolen.

The truth is, putting a freeze on your credit report is a tool available to every consumer who is concerned about becoming an identity theft victim.

Basically, a credit freeze will prevent anyone from accessing your credit report, including lenders. So, if your information is used to apply for credit, the lender won't be able to see your credit report, and therefore no new credit can be issued in your name. The freeze remains in place until you choose to lift it.

Is a credit freeze a good idea for you?
A credit freeze does give you maximum control and peace of mind when it comes to protecting your identity. However, there are a few things to know before you do it.

The biggest consideration is how often you anticipate needing to use your credit in the near future. It is possible to apply for credit by permanently or temporarily lifting the freeze, but know that it is a process that involves some hassle anytime you need to do it.

Speaking of hassle, also bear in mind you'll need to freeze your credit with each of the three credit bureaus individually (Equifax, Experian, and TransUnion).

Also, freezing your credit has absolutely no impact on your existing credit lines. For example, you'll still be able to use your credit cards just as you normally would. So, you'll still need to be somewhat cautious because a credit freeze does not protect you if someone steals your existing account information.

Does it cost anything?
Maybe. If you are already a victim of identity theft, freezing your credit is absolutely free. For non-victims, the fee charged varies in accordance with state law, but is a maximum of $10. In some states, like South Carolina, freezing your credit is free, whether your identity has been stolen or not. Here is TransUnion's table of fees to give you an idea of what to expect.

How and when to "thaw" your credit
In order to be able to apply for credit with a freeze on your reports you'll have to lift the freeze, either temporarily or permanently.

Both are relatively easy, and must be done with all three bureaus individually, and all three let you unfreeze your credit either online or by phone for a specified period of time. You'll need to sufficiently prove who you are with your Social Security Number, date of birth, and the Security Freeze PIN you are given when you place the freeze in the first place. For each bureau's procedures for freezing and unfreezing your credit, check out these sections of Experian's, Equifax's, and TransUnion's websites.

While it sounds like a very drastic action, freezing your credit can be an excellent way to protect the credit you've built. It doesn't affect your ability to use your existing credit accounts, and the procedure for temporarily lifting the freeze is relatively easy and straightforward.