Credit Freeze

A credit freeze, also called a security freeze, is a tactic that blocks access to a consumer’s credit information.

A credit freeze allows a consumer to control and restrict access to their credit report. This makes it more difficult for thieves, scammers and other unauthorized parties to open credit in that consumer’s name without their permission. This freeze prevents unauthorized credit requests or accounts because a potential creditor usually needs to check an applicant’s credit report before making a credit decision. If that business cannot access the information due to a credit freeze, they will probably be unable to approve any new credit accounts. However, a credit freeze does not prevent unauthorized parties from making changes to your existing accounts so it is still important to closely monitor your account activity, which is usually easy to do online.

A consumer who would like to freeze his credit pays the credit reporting agencies a small fee to have his credit report data locked and inaccessible to third parties.

A credit freeze does not prevent you from applying for new credit, or applying for a loan or mortgage. However, if you do want to apply for credit, you will need to have your credit freeze lifted. You may also need to life the credit freeze if you are applying for a job and the employer conducts a credit check as part of the background screening.

To lift the freeze, you submit your request to the credit reporting agencies and pay a small fee. You may be asked to provide the security PIN you received when you first initiated the freeze, so be sure to keep that information in a safe place. If you know which credit reporting agency the business that needs access to your information uses, you can just have the freeze lifted by that particular agency.

Who would use credit freezes? The largest group of people who freeze their credit are victims of identity theft. By freezing their credit, victims can stop thieves from opening new accounts in their name. When the thief attempts to sign up for a new financial service, the company will be unable to access credit history and will deny the thief. Other people who could benefit from credit freezes are people who want to limit their own ability to get credit, such as to prevent impulse purchases, and guardians of the elderly who want to prevent financial elder abuse.