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A credit freeze, sometimes called a security freeze, is a free tool you can use to help protect yourself from credit fraud resulting from identity theft. A credit freeze blocks most companies from accessing your credit report until you lift it, or "thaw" your credit.
When you freeze your credit reports, it makes it harder for criminals who may have stolen your personal credentials (account numbers, passwords, Social Security number and the like) to commit credit fraud by taking out loans or credit cards in your name.
A credit freeze prevents what's typically a lender's first step in processing a credit application—checking your creditworthiness by reviewing your credit reports or requesting a credit score based on those reports. Because the lender isn't able to complete this crucial step, having credit freezes in place at the three national credit bureaus (Experian, TransUnion and Equifax) effectively prevents processing of any credit application in your name.
While that can be effective at preventing unauthorized credit applications, it can make life a little more challenging when you submit a legitimate loan or credit card application. To allow a lender to process your application, you'll need to thaw your credit reports any time you apply for a loan or credit card account.
When Should I Set Up a Credit Freeze?
If you've been a victim of identity theft or credit fraud, or suspect you might be, you have more than one option. There are less-disruptive alternatives to a credit freeze (see below), including fraud alerts, but freezing your credit is one tool to consider.
Other reasons to consider actions to protect your credit include:
- Signs of suspicious activity on your credit reports, such as new credit accounts or inquiries you don't recognize
- Unexplained bills or collection notices on your phone or mailed to your address
- Unauthorized withdrawals or cash transfers from your checking or savings accounts
- Notice that your personal information has been compromised in a data breach
How Much Does a Credit Freeze Cost?
Credit freezes are free to set up at each of the national credit bureaus. You must contact each bureau separately to freeze its respective credit report, and to thaw it later.
How to Freeze Your Credit
You must contact each credit bureau separately to freeze your credit report with that company.
When requesting your credit freezes, you must provide:
- Your Social Security number
- A copy of a photo ID
- Proof of address such as a recently postmarked utility bill
You can submit your proof of ID and address as digital files when submitting a credit freeze request online.
When you activate your credit freeze, the bureau may supply or ask you to create a personal identification number (PIN) or password to use when lifting or reactivating your freeze.
Does a Credit Freeze Affect My Credit Score?
A credit freeze has no impact on your credit score or on your ability to qualify for loans or credit cards.
Because credit freezes prevent lenders from evaluating credit to process applications, they can hinder your ability to access new credit. You must thaw your credit before you apply for a loan or credit cards, or lenders will be unable to determine your creditworthiness and decide what kind of credit offer to make you. Failure to lift your credit freeze beforehand could mean delays in your credit applications.
Aside from preventing lenders from checking your credit, a credit freeze does not interfere in any way with:
- Your ability to use existing credit (credit cards, home equity lines of credit, other revolving lines of credit and so on)
- Your ability (and obligation) to make loan and credit card payments; our creditors will continue to report your activity to the credit bureaus
- Regular updates to your credit report, reflecting your credit usage and payments
- Access to your own credit scores or free annual credit reports
- Credit checks related to job applications, apartment rentals or insurance underwriting
When Should I Unfreeze My Credit?
You should unfreeze your credit report anytime you plan to apply for credit, to give lenders access to your credit reports and credit scores. Be sure to lift your freezes at all three credit bureaus because lenders may work with any bureau (or all three) when checking your credit.
The same webpages you'd use to request a credit freeze can also be used to lift a freeze. You can also lift a freeze by phone, using the password or PIN linked to your freeze at each bureau.
When you thaw your credit, you may have the option to either lift the freeze permanently or suspend it temporarily, or to grant one-time access to a particular creditor or specifying the duration of the suspension (an hour, a day or a week, for example). If you know only one lender will be checking your credit, you can request a one-time PIN instead and provide that PIN to the lender (just be sure the lender has the ability to enter a single-use PIN when they are accessing your credit). Policies vary by bureau, so make sure you understand your options are before you begin the process.
When you enter your password or PIN online or by phone, your credit will be thawed within one hour. If you lose your password or PIN, the credit bureaus will need to verify your identity, which will delay the process.
Credit Freeze Alternatives
If you're contemplating freezing your credit, you should be aware of a couple of alternative measures you can use to help protect your credit from fraud.
Another free security measure to consider instead of a credit freeze is a fraud alert. A fraud alert is a temporary measure that expires on its own in one year or in seven years, depending on the type of alert you request.
Rather than blocking all access to your credit report the way a credit freeze does, a fraud alert gives lenders access to your report and scores, but asks them to verify your identity before processing any credit or loan applications made using your name.
A fraud alert provides a more convenient and potentially safer option compared with the process of lifting and reapplying credit freezes at the credit bureaus anytime you need to allow access to your report and scores. A fraud alert stays in place while you continue to use your credit as normal, and you don't need to worry about lifting it, as you would with a credit freeze.
In addition, requesting a fraud alert at any one of the three credit bureaus (Experian, TransUnion or Equifax) automatically places an alert at all three bureaus. If you choose to remove a fraud alert before it expires, however, you'll need to do so with each bureau separately.
If you are at a stage in life where you apply for credit fairly regularly, a fraud alert is a less intrusive option than a credit freeze, but you'll have to renew it if you want to keep its protections in place after its expiration date.
Locking your credit report is another alternative to freezing your Experian credit report. The ability to do so is one of the benefits of the Experian IdentityWorks Premium℠ service. The CreditLock included in Experian's service feature lets you block or unblock access to your Experian credit file instantly so you can keep your credit report secured when you're not applying for credit, but give lenders access to it whenever you're ready. CreditLock also sends you real-time notifications when anyone applies for credit in your name while your credit is locked.
Locking or unlocking your credit through CreditLock takes effect instantly, and can easily be done via the Experian website or app.
When you've been victimized by credit fraudsters or identity thieves, a credit freeze can provide peace of mind by helping you to secure your credit information. By itself or combined with free Experian credit monitoring that can alert you to suspicious credit activity, a credit freeze is a powerful defense against unauthorized access to your credit.