A credit freeze, also known as a security freeze, is a tool that allows individuals to lock or restrict access to their credit reports — offering some protection against identity theft.
While there are other types of actions, including a credit card freeze or lock, that may help limit things like card testing fraud, they aren’t the same as freezing a credit report. A credit card lock prevents the specific credit card from being used, while a credit freeze prevents access to a credit report and stops any new credit account from being opened.
Since a credit freeze is all encompassing, it can be a crucial step to protecting financial information and preventing potential fraud. Read on to better understand what a credit freeze entails.
A credit freeze stops potential creditors and lenders from accessing an individual's credit report, preventing unauthorized persons from opening new credit lines in someone else’s name. So, in the case of identity theft or a data breach, activating this service can be important since it prohibits credit bureaus from disclosing the contents of a credit report to anyone requesting the information. Lenders will usually not extend credit to anyone claiming to be the user during this period.
Credit bureaus collect and maintain records of individuals’ borrowing and repayment activities and are responsible for the safekeeping of credit information. Three major credit bureaus play a pivotal role in the credit freezing process. They are:
To better understand the benefits, a credit freeze can be compared to locking the front door of a house. Just as locking the front door prevents unauthorized entry, a credit freeze restricts access to an individual’s credit report, making it harder for cyber criminals to open new accounts in someone else’s name and commit fraud.
Other forms of credit protections exist, such as fraud alerts, credit monitoring, and credit locks. These are akin to locking only a specific room, or in the case of credit monitoring, using cameras to monitor attempts to gain access.
Other protections may be helpful, but they don’t provide the same level of comprehensive security as a credit freeze.
A credit freeze is a free process and can be done online, by phone, or by mail. Here's how to do it:
A credit freeze may be needed in several situations, including:
A credit freeze may carry several misconceptions, such as:
A credit freeze doesn’t have any effect on an individual’s credit score. However, since a credit freeze prevents potential lenders from accessing a credit report, a new application for credit — be it a credit card, loan, or a mortgage — may be denied unless the freeze is unlocked or lifted to allow access to the report.
Unlocking a credit freeze — either temporarily or permanently — is a simple process. Identity verification details and the PIN or login details initially provided by each credit bureau are needed to unlock a credit freeze.
Just like freezing, unfreezing credit is free and can be requested online, by phone, or by mail.
After the credit bureau processes the unfreeze request, they will unlock the credit freeze, which can take a few minutes to an hour if done online or by phone.1
While it may seem like a simple decision to freeze credit for safety purposes, there are some potential pros and cons to consider before initiating a security freeze.
We use cookies to improve your experience on our site. May we use marketing cookies to show you personalized ads? Manage all cookies