When Should I Use a Credit Freeze?

If you're the victim of a data breach, someone has stolen your identity, or you have reason to believe that you are likely to become the victim of identity theft, you might want to initiate a credit freeze to prevent a thief from opening accounts in your name.

If your sensitive personal information, like your social security number, birth date, address, and driver's license number, has been exposed in a data breach—like the one at Equifax in 2017— or someone has stolen your identity (or you have reason to believe that you are likely to become the victim of identity theft), you might want to initiate a credit freeze to prevent a thief from opening up accounts in your name and ruining your credit. Read on to learn how a credit freeze works, when to use a credit freeze, and how to initiate a freeze.

Understanding Credit Freezes

A credit freeze—often called a security freeze—basically seals your credit report. This prevents a credit reporting company from releasing your credit report to a third party without your consent.

Once you set up a credit freeze, an identity thief generally won’t be able to open up new accounts, such as getting a mortgage loan or signing up for a credit card, in your name. This is because most businesses will not extend credit without first checking your credit report. If your credit file is frozen, the creditor can’t access your credit report, and that means the thief won’t be approved to open the new account using your identity.

Exceptions to the Freeze

A credit freeze generally does not have an impact on your existing accounts. Even under a credit freeze an existing creditor can have access to your credit report for certain types of account review, collection purposes, fraud control, or related activities. For example, the following entities may still access your credit report during a freeze:

  • a collection agency acting on behalf of an existing creditor, and
  • state or local agencies (such as law enforcement and child support agencies).

A Credit Freeze Has Nothing to Do With Your Credit Card Purchases

A common misconception is that a credit freeze means you can’t use your current forms of credit, such as a credit card. However, freezing your credit file does not affect your ability to use your existing accounts. Your credit report is not accessed when you make a purchase with a credit card. A credit freeze only pertains to new credit applications. This means that you can still use your existing credit cards to make purchases during a credit freeze.

On the down side, if the thief stole your credit card information, he or she can use your existing credit card during a credit freeze as well. Remember, scammers don’t need to access your credit report to charge purchases to an already existing account. So you do need to report the theft to your credit card issuer and get a new card in these circumstances. (Learn more about what to do if your identify is stolen.)

When to Use a Credit Freeze

It is generally advised that you request a credit freeze at the three national credit reporting agencies (TransUnion, Equifax, and Experian), if:

  • you know someone has stolen your identity
  • you've been told that your personal identifying information has been compromised (again, as in the case of the Equifax breach), or
  • if you suspect someone has stolen your Social Security number and other information, such as your date of birth, that can be used to open credit in your name.

How to Set Up a Credit Freeze

You may request a security freeze by contacting each of the three national credit reporting agencies (Equifax, Experian, and TransUnion) individually. You can make your request:

  • online
  • by certified mail, or
  • by calling the credit bureau.

You must make separate freeze requests with each credit bureau. (Learn more about the three national credit reporting agencies.)

How to Temporarily or Permanently Lift the Freeze

The freeze generally remains in place until you choose to lift or "thaw" it. When you place a credit freeze on your file, you will receive a personal identification number (PIN) or password that you can use to:

  • permanently lift the freeze, or
  • temporarily lift the freeze for a specific party or period of time.

If you are actively seeking new credit, like a new loan or a new credit card, or applying for a certain job (some employers won’t hire you without a credit check), you’ll need to plan a few days ahead and remember to lift the freeze, either completely or for a specific person or business. Otherwise you could face hassles and delays.

Cost to Set Up a Credit Freeze

The cost of imposing a credit freeze varies between states, though it typically ranges between $2 and $10 for each credit reporting company. There is also generally a small fee for lifting the freeze temporarily or removing the freeze altogether. (Depending on your state’s law, if you are the victim of identity theft or over the age of 62 or 65, there is often no charge to add, temporarily lift, or remove the credit freeze.)

You can find out the specific charges related to credit freezes in your state by going to the Equifax, Experian, and TransUnion websites.

More Information

Go to Identitytheft.gov and Identitytheft.gov/databreach to learn more about how to protect yourself if someone steals your identity or after a data breach.

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