A credit freeze is a service that allows consumers to block most companies from accessing their credit reports. Consumers use the service to avoid identity theft and ensuing credit fraud.
Learn about what a credit freeze offers and how to request one to thwart identity thieves.
What Is a Credit Freeze?
A credit freeze, also called a security freeze, is a free service offered by credit bureaus that prevents most companies from making new inquiries into your credit reports. Consumers who suspect that their identity may be at risk commonly use the service to avoid credit fraud stemming from identity theft. As creditors can’t check your credit report to determine your creditworthiness if your credit is frozen, potential thieves will also have a much harder time opening fraudulent accounts in your name.
- Alternate name: Security freeze
You can still check your own credit report when you have a credit freeze in place. And credit bureaus will still update your reports while your credit freeze is in effect.
How a Credit Freeze Works
When processing an application for a credit card, loan, or other new credit account, lenders first review your credit reports on file with the major credit bureaus (Equifax, Experian, and TransUnion) in order to assess your creditworthiness or likelihood of repaying what you borrow.
If you think someone has stolen personal information about you, such as your Social Security number or a bank account number, you want to prevent lenders from making inquiries into your credit reports, to keep fraudulent accounts from being opened in your name. After all, when your personal information is compromised, you’re at risk of having your identity stolen, which can lead to surprising bills or the denial of credit when you need it. The easiest way to safeguard against these scenarios is to freeze your credit.
It’s free to freeze (and unfreeze) your credit reports with the three major credit bureaus, but you'll need to make a separate freeze request with each bureau. Once you make an online or phone request to freeze your credit report with the relevant bureau, the credit freeze must take effect within one business day. A freeze request made by mail must be effective within three business days of its receipt.
To initiate the freeze, supply the credit bureau with the following:
- Your Social Security number
- A photocopy or digital file of a photo ID
- Proof of your address, such as an image of a recent bill
A credit bureau must send you a written confirmation the freeze has gone into effect within five business days. You'll typically be given a personal identification number (PIN) or password, which you'll need to unfreeze your credit.
You can freeze your consumer reports with smaller credit-reporting companies, too. These include ChexSystems, which deals with the use of checking accounts, and CoreLogic Teletrack, which specializes in subprime lending products.
Like the big three credit bureaus, small companies must provide you with a free credit report when you request one. You're entitled to one free credit report from each company every year, and you must also be given a free report by a company if you have been denied credit because of a negative item in that company's report on you.
How To Unfreeze Your Credit Report
As a credit freeze prevents lenders from checking your credit, it also prevents you from being approved for new credit until you "thaw" or lift the freeze.
Fortunately, you have the flexibility to lift the freeze when you’re ready to apply for credit. You can temporarily lift the freeze with the relevant credit bureau, and at no cost, by supplying the PIN or password you were provided and specifying how long the lift should be in effect. Requesting a temporary lift online or over the phone gives you faster results; the bureaus must lift the freeze within one hour. If you make the request by mail, the bureau must lift the credit freeze within three business days.
Do I Need a Credit Freeze?
If you suspect your personal information has been compromised—perhaps because you’ve received a data breach notification—freezing your credit can protect you from potential identity theft. A credit freeze can also help you avoid further damage if you know someone has stolen your identity.
But bear in mind: A credit freeze isn't a panacea for your credit problems. Some companies and government agencies can still access your credit report when you have a freeze in place. These include:
- Lenders with whom you have an existing relationship
- Debt collectors hired by an existing lender
- Some government agencies, including those that oversee child support payments
- A company you previously hired to monitor your credit
Similarly, credit card companies can still pull your credit report to decide whether to give you pre-screened credit offers. If you don't want them, you must formally opt out of them at OptOutPrescreen.com.
In addition, a credit freeze does not prevent credit checks by potential employers whom you've authorized to conduct a background check or landlords or insurance companies you've requested coverage from.
Finally, a credit freeze doesn’t offer 100% protection from identity theft. Thieves can use your personal information to commit other types of fraud, like account-takeover fraud. With this type of fraud, someone hacks into one of your existing accounts, changes the login credentials, and makes unauthorized charges while also making it difficult for you to retake possession of the account.
Alternatives to a Credit Freeze
A fraud alert is another free security measure that can help you prevent identity theft, but it’s not as strong as a credit freeze. With a fraud alert, companies must take additional steps to verify your identity before accessing your credit report. If you request a fraud alert from one of the three major credit reporting companies, it must notify the other two companies about the fraud alert. The alert remains in effect for one year and may then be renewed.
In addition, all three major credit bureaus offer a credit-lock service that operates similarly to a credit freeze but enables you to lock and unlock your credit report online or via mobile app. The monthly fee varies by the company and individual offer but is in some cases free. For example, as of July 2020, TransUnion offers a credit lock for both TransUnion and Equifax reports for $24.95 per month. Equifax offers credit locking and unlocking at no cost through a mobile app.
Credit Freeze vs. Lock
Although consumers can either freeze or lock their credit to block access to their credit reports and thwart fraudsters who may want to steal their identity, the two services differ in a few significant ways. For one, a credit freeze is free, whereas a credit lock, while sometimes free, is often offered by credit bureaus for a fee.
In addition, it takes at least one business day for a bureau to process a freeze request online or by phone and typically, you'll need to supply a PIN to the bureau to lift the freeze. This makes it a more-suitable remedy for consumers who don't believe they need imminent access to their credit reports. You can often lock your credit report with any given credit bureau via an app on a mobile device, and the change takes effect more or less instantly. This makes it a better solution if you're in the process of applying for new credit and want to keep your credit reports as accessible as possible. When you're ready to unlock your credit report, you don't have to supply a PIN number.
|Credit Freeze||Credit Lock|
|Provided at no cost||May come with a fee|
|Can be requested online or by phone or mail||Can be requested through an app|
|Takes at least one day to take effect, which can hinder credit applications in the near term||Goes into effect immediately, granting more accessibility to credit reports|
- A credit freeze is a service that lets you block access to your credit reports to most lenders and thereby thwarts fraudsters and staves off identity theft.
- You must freeze your credit report with each credit bureau online or by phone or mail by supplying three pieces of personal information.
- A credit freeze won't block all entities from accessing your credit reports, nor will it prevent all forms of fraud.
- Alternatives to credit freezes include fraud alerts and credit-lock services.