Identity theft is more common than some people realize. In 2021, the Bureau of Justice Statistics (BJS) reported that about one in 10 people were identity theft victims within the previous year. That statistic could soon skyrocket, as a recent class-action lawsuit claims a cybercriminal group going under USDoD sold personal information (including Social Security numbers) from nearly three billion people on a stolen data marketplace.
With this stolen information, fraudsters could open credit cards and take out loans in your name, damaging your credit history in the process. Fortunately, freezing your credit can help protect your credit score by preventing unauthorized access to your credit report.
Read on to learn about credit freezes, what happens when you freeze your credit and how they can help you prevent identity theft.
What is a credit freeze and how does it work?
A credit freeze allows you to block lenders from accessing your credit file. There are three major credit bureaus — Equifax, TransUnion and Experian — and each has a separate credit file on you. Freezing credit requires performing the necessary steps with each of these credit bureaus. When freezing your credit, the credit bureaus place restrictions on your file, preventing anyone from seeing the information it contains. A freeze won’t affect your credit score or current credit lines.
The purpose of a credit freeze is to stop scammers and thieves from obtaining lines of credit in your name. With an active credit freeze, a person can still apply for credit in your name, but the lender would most likely deny their application. This is because lenders review credit files before approving loans, credit cards and credit lines. If they can’t access your credit, they can’t approve the credit lines. Credit freezes have limitations, though. For example, they won’t stop criminals from using your current credit lines and cards or trying to steal your identity.
After freezing your credit report, the report will remain locked until you unfreeze it. If you use a credit freeze due to identity theft, it’s important to report the identity theft to the appropriate channels, including the Federal Trade Commission (FTC) and your local police.
What happens when you freeze your credit?
You must request security freezes when you decide to freeze your credit file. Once you request them, the bureaus place a label on your file that tells them your file is frozen. This takes about 24 hours to take effect. This label blocks most creditors from accessing your credit information, but it doesn’t block everyone. Certain entities, including your current lenders and collection companies they hired, can still access your information after freezing your credit file.
You can still apply for new credit lines after freezing your account, but you must perform the necessary steps for unlocking the credit freeze first if you want the lenders to approve your requests. This is because lenders will likely deny approving your loan requests if they discover a credit freeze, even if they’re legitimate requests.
How to freeze your credit report
In 2018, a federal law called the Economic Growth, Regulatory Relief, and Consumer Protection Act was passed to allow people in all states to freeze their credit for free. As a result, you can freeze your credit without paying anything, but the process requires several steps.
1. Determine whether you need a credit freeze
Most people freeze their credit for a particular reason. You might freeze your credit file if you’re a victim of identity theft, as identity theft credit freezes are very common. You might also freeze it if you experience a breach of personal information like your Social Security number. Using a credit freeze is also wise if you see something on your credit report that shouldn’t be there. This is why learning how to read your credit report is vital so you’ll know how to identify fraudulent activity.
2. Contact the credit bureaus you want to freeze your credit with
Next, contact each of the credit reporting agencies. If you freeze your account with only one, the other two will not be locked. You can choose to perform only one credit bureau freeze if you want, but this won’t offer protection for your entire credit file. Putting in the time to freeze all three will generally be the better option.
3. Decide how you want to initiate the credit freeze
As you learn how to freeze your credit for free, you’ll discover that the three bureaus, Equifax, Experian and TransUnion, each offer three methods.
Online credit freeze
Freezing your credit online is the fastest option, and it’s easy to do. Visit each credit bureau’s website to initiate an online freeze. The bureaus will ask you to verify some information before processing your freeze request, including your name, Social Security number and birth date.
Credit freeze by phone
You can contact each of the credit bureaus by phone to initiate a credit freeze:
- TransUnion credit freeze: 888-909-8872
- Equifax credit freeze: 800-685-1111
- Experian credit freeze: 888-397-3742
Again, the bureaus will ask for some information to verify your identity before processing the credit freeze.
Credit freeze by mail
Additionally, you can request a credit freeze by mailing your request to the credit bureaus.
- Equifax
Equifax Consumer Fraud Division
PO Box 740256
Atlanta, GA 30374
- Experian
Experian
PO Box 9554
Allen, TX 75013
- TransUnion
TransUnion Fraud Victim Assistance Department
PO Box 2000
Chester, PA 19016
Processing a credit freeze by mail takes longer than the other methods. When requesting a freeze by mail, each bureau requires specific information. For example, Experian requires your full name, Social Security number, addresses for the last two years and birth date. It also requires a copy of your driver’s license (or other government-issued ID) and a copy of a recent utility bill or bank statement.
4. Set up a secure PIN
Performing a request online or over the phone begins with verifying your identity. The credit reporting bureaus must verify that you are who you say you are. After completing the verification, they’ll provide you with a PIN, which is a unique number you’ll use to unfreeze your credit when you’re ready. You can also use the same PIN to freeze your account in the future if necessary.
5. Keep an eye on your frozen credit
Monitoring your credit report after a credit freeze is essential. You must first learn how to check your credit report, as there are numerous ways. One option is to request an annual credit report. You can do this multiple times a year, depending on the bureau. However, this doesn’t give you constant access to your credit file. You may want to sign up for credit monitoring services to have access to your file all the time. Some are free, while others may charge a monthly fee.
How to unlock a credit freeze
You may decide it’s time to remove your active credit freezes, and you can do so temporarily or permanently. To lift credit freezes, you must contact each bureau that has a freeze on your account. While each bureau may have different steps to complete for unlocking credit freezes, they all allow you to do this electronically or over the phone. If they issued a PIN, you must provide it when requesting the credit freeze lift. After completing the necessary steps, the credit bureaus will lift credit freezes. Once unlocked, lenders can once again see your credit information. Unfreezing your file temporarily is necessary if you want to apply for a loan and then freeze your file again. You can unfreeze your file permanently if you determine you no longer need the protection of the credit freeze.
Credit lock vs. freeze
When considering your options, you might wonder about the differences between a credit freeze vs. lock. Both services offer similar results — locking your credit file — and many people use these terms interchangeably. Both services also require contacting the credit reporting bureaus, but using a credit lock is generally faster and easier.
A credit freeze requires contacting the bureaus by phone, electronically or mail and completing the necessary steps. To perform a credit lock, generally you must sign up for credit monitoring services to have access to your credit files. These are generally services you’ll have to pay for, but they give you access to an app where you can easily lock and unlock your credit file as needed. You won’t need a PIN to perform these steps, so locking your file is somewhat easier.
The downside is that credit locks do not provide any legal protection, nor are they governed by any federal laws. The law gives you the right to free credit freezes and the ability to put fraud alerts on your credit files. One benefit of this is that creditors must contact you directly before approving any loan applications they receive from you. These laws also give you the legal right to freeze the credit of a minor or incapacitated child.
In addition, you can set up fraud alerts with the major credit bureaus. You can contact each one to set this up, and the credit bureaus place a “Fraud Alert” flag on your account. When this occurs, they must contact you when lenders request new accounts in your name. The fraud alert flag generally lasts one year, but you can use an extended fraud alert to extend the timeframe.
How to freeze credit FAQ
Why is my credit frozen if I didn’t freeze it?
There are only a few situations in which someone can freeze someone else’s credit. These include if you’re a minor or incapacitated individual. If your credit is frozen without your knowledge and these exceptions don’t apply to you, it could’ve happened by mistake. You can contact the bureaus to find out why it happened and to unfreeze the files.
What problem does frozen credit create?
Freezing your credit doesn’t affect your credit score or your current accounts. Instead, it stops entities from accessing your credit file. As a result, lenders may turn down loans and credit lines you apply for while you have an active credit freeze.
How do I know if my credit is frozen?
Freezing your credit isn’t something you need to do unless you experience or suspect a problem. Therefore, you should consider freezing your credit if you encountered a data breach, someone steals your identity, you notice credit inquiries you didn’t initiate, you lost your Social Security card or someone steals your wallet.
You might also freeze your credit if you don’t need any loans or credit lines. You can do this as a safety measure to protect your credit when you experience times where you won’t be applying for any credit lines, credit cards or loans.
Can you freeze credit cards?
A credit freeze locks your entire credit file, so you can’t freeze just one credit card. However, you can lock an individual card if you lose it or suspect fraud. To do this, you can contact your credit card company. Many credit card apps offer functions to lock and unlock cards, but the process varies by company. Locking a credit card stops the card from working. If you or anyone else tries to use it, the credit card company will deny the transaction.
Summary of Money’s how to freeze credit
Your credit score matters, so learning how to freeze your credit is vital. Freezing your credit score protects your credit and stops people from accessing your credit information. It’s a great step to take when you suspect or encounter fraud, including identity theft, as it stops most lenders from approving credit in your name. Performing a freeze takes some work, as you must contact all three credit bureaus, but it’s an effective tool to use when you need to protect your credit score and personal information.