Credit freeze
Also called Security freeze
A free tool that blocks most new lenders from viewing your credit report, making it much harder for someone to open accounts in your name.
What it means
A credit freeze restricts access to your credit report, so most creditors cannot check it to approve a new account. Federal law makes placing and lifting a freeze free. You must request it separately with each of the three major credit bureaus, usually online, by phone or by mail.
A freeze does not affect your credit score or your existing accounts, and current creditors can still review your file. When you apply for new credit, rent an apartment or open certain accounts, you can temporarily lift the freeze, often within minutes online. A fraud alert is a lighter alternative that asks lenders to verify identity but does not block access.
Example
For example, after a data breach exposes their information, someone freezes their credit at all three bureaus. Months later, before applying for a car loan, they lift the freeze for a few days and let it return automatically afterward.
How it’s used
- Protecting against identity theft after a data breach
- Safeguarding the credit of a child or older relative
- Long-term protection when not planning to apply for credit
Strengths and weaknesses
Strengths
- Free and highly effective against new-account fraud
- No effect on credit scores
- Can be lifted temporarily when needed
Weaknesses
- Must be placed and lifted at each bureau separately
- Adds a step before applying for credit
- Does not stop fraud on existing accounts
Good to know
- Keep the PIN or account login for each bureau in a safe place to make lifting the freeze easier.
Related terms
Educational information only, not financial, tax or legal advice. Rules, limits and rates change; check the IRS, your lender or plan, or a qualified professional before acting.