What Is a Credit Freeze? 5 Things to Know

A credit freeze (or security freeze) is a common option for individuals who have been impacted by a data breach and are worried about identity theft. It essentially restricts access to your credit reports, which could help protect you from fraud.

By limiting access, you can make it harder for identity thieves to open new credit accounts under your name. That’s because lenders typically need to review your credit history before approving anything. If your credit reports are frozen, many companies won’t approve a new account for you. (Don’t worry, you can always unfreeze your credit.)

If you’re thinking about a credit freeze, here are five key things to know before putting in the request.

1. A credit freeze is different from a fraud alert and a credit lock

It’s important not to confuse a credit freeze with other anti-fraud tools, such as a fraud alert and a credit lock.

Fraud alerts

Setting up a fraud alert doesn’t restrict access to your credit reports. It simply tells lenders that they need to take some extra steps to verify your identity before approving or opening a new account in your name.

Fraud alerts may be an option for someone who thinks their identity might’ve been stolen but hasn’t been able to confirm for sure. For example, if your information has been compromised in a data breach and you’re not sure if someone has actually stolen your identity, a fraud alert might make sense as a first step. Visit the Federal Trade Commission (FTC) to learn more.

Credit locks

What is the difference between a credit freeze and a credit lock? A credit lock is a service (which you usually have to pay for) that allows you to lock and unlock access to your credit reports almost instantly (typically through an app). It can provide a more convenient way to manage access to your credit reports.

However, convenience doesn’t necessarily mean better protection. Keep in mind that credit lock services vary from provider to provider. Some may offer more features than others.

Credit freezes, on the other hand, are regulated by law. Because of this, generally speaking, a credit freeze may provide more legal protections than a credit lock. If you’re interested in setting up a credit lock, do some research before signing up to see if this service makes sense for you and your needs.

2. You can freeze your credit for free

Whether or not you’ve been a victim of identity theft, if you want to freeze your credit, you can do it for free through the three nationwide credit bureaus: Equifax, Experian and TransUnion.

You’ll want to contact each of the credit bureaus directly to put in a request. Generally, you’ll need to answer a few questions about yourself and provide some documentations to verify your identity. This may include your Social Security number, date of birth, photo ID and proof of residency.

3. You can remove a credit freeze – temporarily or permanently

Once you put a freeze on your credit, it stays in place until you ask the bureaus to remove it. So if you want to open a new credit account, you’ll have to remember to lift the freeze so that lenders can access your credit reports. Otherwise, you may run into delays during the credit check.

You can put in a request to unfreeze your credit by visiting the three national credit bureaus online or contacting them by phone.

According to the federal government, once you put in a request, a credit bureau has to unfreeze your credit within one hour. (If the request is made by mail, they have three business days to do it after receiving it.)

You can choose to lift (or “thaw”) the freeze either temporarily or permanently. For instance, let’s say you want to apply for a loan and your lender needs to run a credit check, but you don’t want to permanently remove your freeze. You can ask the credit bureaus for a temporary lift, and you can usually specify how long you want the freeze to be lifted.

If you decide to permanently unfreeze your credit, you can make the request and then you can always go back to freeze it again if you ever need to.

4. A credit freeze does NOT affect your credit score

Freezing your credit won’t impact your credit score. It also won’t keep you from getting your free annual credit reports from the credit bureaus.

But as we mentioned earlier: Because a credit freeze makes it harder for lenders to access your credit reports, it could cause delays if you’re trying to open a new account without lifting the freeze first.

Good to know: A credit freeze doesn’t block everyone from seeing your credit reports. Certain existing creditors, debt collectors, as well as government agencies may still be able to access them under certain circumstances.

5. A credit freeze won’t protect you from everything

While a credit freeze can block access to your credit reports and help keep scammers from opening up new accounts under your name, it doesn’t prevent identity theft.

If a thief has your credit card numbers already, they can still make unauthorized purchases with your account. Or if they have your Social Security number, they can still pretend to be you and make fraudulent claims in your name.

So even though a credit freeze can help reduce the chances of credit fraud, you still have to be vigilant about monitoring your existing accounts for any suspicious activities.

Check out our cybersecurity article to learn what steps you could take to help you stay protected.