Credit Freeze

Putting a “credit freeze” on your credit means that no one can access your credit — not you, not someone you authorize, and not someone trying to steal your identity. A freeze essentially locks down access to your credit.

The Effect of Freezing Your Credit Reports

When you have a credit freeze in place, no one can access your credit. Even if you authorize someone to access your credit they will not be able to with a freeze in place. This applies to you, too. If you have a credit freeze in place, you cannot open a new line of credit (e.g.: open a new credit card, apply for a loan, etc.).

Freezing your credit means that:

  • A credit card company cannot check your credit if you are signing up for a credit card
  • A cable company cannot check your credit if you are signing up for cable
  • A loan officer cannot check your credit if you are planning to take out a loan
  • An employer cannot check your credit for a background check
  • A leasing agent cannot check your credit if you are planning to rent an apartment
  • An insurance agent cannot check your credit if you are trying to buy insurance
  • A mortgage banker cannot check your credit if you want to refinance your mortgage

Freezing your credit reports does not have an effect on your credit score. It also does not affect any open accounts. You can still use your credit cards that are open just like normal. You just can’t open new cards.

Why Freeze Your Credit Reports?

Freezing your credit reduces the chance that someone will be able to open credit in your name.

This is really awesome because you reduce the chance of identity theft exponentially.

If you have a credit freeze in place, you can feel more confident about using credit cards, shopping online, and using your personal information in public. With a freeze in place no one can open credit in your name even if they get access to your personal information.

For example, if someone gets ahold of your personal information and attempts to open a credit card in your name or steal your identity, she won’t be successful if you have a freeze on your credit. No one (including you) is able to open a line of credit in your name if you have a freeze in place.

How To Freeze (and Unfreeze) Your Credit

It’s super easy to freeze your credit. You can do it online as long as you can answer the security questions asked. Otherwise, you may have to call or mail something in.

There are three credit bureaus you have to freeze your credit at – Experian, TransUnion, and Equifax. Here are the links to freeze your credit at each bureau:

Almost all states require a small fee to freeze your reports – usually $2-$12 (if you have been a victim of identity theft, it may be free). For example, in Ohio it’s $5 to freeze your credit at each bureau (total of $15).

After you freeze your reports, you’ll get information (like a pin) that is really important to keep. You’ll need it to unfreeze your credit.

If you decide that you want to unfreeze your credit, you can do so temporarily (for a number of days) or permanently. You can unfreeze your reports by going to each of the credit bureaus’ websites and paying the applicable charge (e.g.: $5 or $10). Again, if for some reason the online process doesn’t work for you, you can call and get your reports unfrozen during business hours by speaking to a representative (or you may mail in your materials but that process takes longer). A couple states, including Kentucky, Nebraska, and Pennsylvania automatically remove your freeze after 7 years. For most states, you remove it yourself.

Should You Freeze Your Credit?

You should consider freezing your credit if you have had your identity stolen or you think it might be stolen in the future. If your credit information is at risk for any other reason that you want additional protection for, you should freeze your credit reports. This is a no brainer.

You also may want to freeze your credit even if you don’t feel threatened. In theory, everyone is at risk for identity theft. And this is just a great way to lessen that risk.

I freeze my credit because I only use my debit card — I don’t have a credit card (I’ve never had one). So, if I have any of my information compromised, I am at a huge risk. I really think the added protection of a freeze is worth it for me.

If you plan to use your credit soon, you should not put a freeze on your credit. For example, if you plan to buy a car through financing (car loan) or apply for a mortgage or sign up for a new credit card, you can’t do any of these things with a credit freeze in place.

Credit Freeze vs. Fraud Alert

An alternative to freezing your credit reports is placing a fraud alert on them. You can place a fraud alert on each of your credit reports, making them accessible (unlike a freeze) but only after extra steps are taken to prove your identity. To do so, you only need to notify one of the three bureaus. The one you notify will notify the other bureaus of the fraud alert on your credit (unlike a credit freeze that requires you notify all three bureaus yourself).

While a credit freeze is a long-term freeze, a fraud alert only lasts 90 days. If you have been a victim of identity theft, you can request an extended fraud alert that lasts for seven years.

My Credit Freeze Mistake

I had all three of my credit reports frozen up until last week. After my debit card was part of the Target security breach (where my debit card info was stolen) I put a freeze on my reports in January 2014 for piece of mind. I also never take out loans or use my credit so I knew I didn’t need to access my credit in the near future. By having my reports frozen, I was adding a layer of protection to my credit in case anyone tried to steal my identity or take out a line of credit in my name.

Fast-forward one year to January 2015 when I received a job offer at a new firm. I was so excited and turned in all of my application materials. One week later, I realized that my employer would not be able to access my credit reports because of the freeze. I completely forgot that employer’s check your credit (usually not for your credit score but to see any bankruptcies or foreclosures). Also, the job was in a different city, which meant getting a new apartment only if my credit was approved. OH MAN! I panicked. I called and had the freezes at each of the agencies lifted, which took about one hour to do. But I realized this over a holiday so I had to wait until the offices were open. Thankfully, I did this before the employer looked at any of the paperwork, but it was still very last minute – and I was frantic.

Needless to say, pay attention to whether you’re making decisions that will require having access to your credit. If you need people to be able to see your credit, you need to life your freeze.

A Final Note!

A great way to protect against identity theft and anyone opening credit cards or loans in your name is to put a credit freeze in place.

I have my credit frozen as an extra layer of protection, and I highly recommend it. Just be aware that you need to lift the freeze if you want to open a new line of credit or give someone else permission to check your credit (like if you were applying for a new job or trying to finance a big purchase).

The best thing you can do is to decide whether you should freeze your credit and take action now. It only took me 15 minutes, so it’s worth it!

Here’s a great post to read next about how to check your credit reports and score.