Credit Freeze Full Guide – All You Need To know

Last Updated: June 22, 2019
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You can call a credit freeze as a ‘security freeze’ because it gives you the opportunity to “lock” your credit data in the major credit bureaus. In this article, we explain how exactly does it work, what are the main pros & cons of it, the main alternatives - and difference between credit freeze, credit lock and fraud alerts.

The good news is that it is now free for everyone in the United States to place a freeze on your credit report.  On September 21, 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act quietly went in effect and made it free for consumers to freeze, thaw or unfreeze their credit report.

A credit freeze blocks any lender from approving new credit in your name.  Before the act came into being, consumers paid a fee to add or remove a credit freeze and it varied from state to state.

What Is a Credit Freeze?

You can call a credit freeze as a ‘security freeze’ because it gives you the opportunity to “lock” your credit data in the major credit bureaus.  You can do this if you want to prevent identity thieves to use your name on anything that may require your credit information or report.  You will get a password or a PIN (personal identification number) that you can use to temporarily lift or remove the freeze as you want.

Even if you execute a credit freeze, it will not affect your credit score or prevent you from getting your annual credit report.  However, you’ll have to lift the freeze if you’re applying for a job, renting an apartment, opening a new account, or buying insurance.  More importantly, identity thieves can still use your existing accounts for their illegal activities, so you still have to keep an eye on your credit card, bank, and insurance statements for indications of fraud.

  • You must initiate a security credit freeze at each of the three credit reporting agencies, namely: Experian, TransUnion, and Equifax.
  • You must use your PIN code every time you want to freeze or unfreeze your credit.
  • If you want to unfreeze your credit report, you should stick to the same process that you used to freeze it. If you froze your report through each of the credit reporting agencies, you will need your PIN to unfreeze it.  Take note that there may be a fee to do it depending on which state you live.

The thing is, a security freeze isn’t a cure-all pill because your existing creditors and lenders can still access your report and credit score even without your PIN.  There are also government agencies, including some law enforcement agencies, that can access your details even after you have frozen your report.

Credit Freeze: Recent Changes

Beginning September 21, 2018, TransUnion, Equifax, and Experian have provided a webpage on their respective websites to handle credit freeze orders and fraud alerts.  The FTC, for their part, created a link to those webpages at IdentityTheft.gov.

On top of this, active members of the U.S. military can receive free electronic credit monitoring for one year from the three major credit-reporting agencies.  After that, they can renew the service for the length of their deployment.

Parents or guardians can now place a credit freeze on their children under 16 years old or on their incapacitated adult wards.

How Do You Freeze Your Credit at Each Bureau?

It’s quite simple to freeze your credit.  Just contact each of the three major consumer credit bureaus – Experian, Equifax, and TransUnion – and request a credit freeze for your credit.  Do remember that freezing your credit is different from locking your credit.

When you make a request, they will ask for your name, address, date of birth, and Social Security Number.  They will then verify your identity by asking you a few questions.  When everything is in order, they will give you a PIN that you can use to unfreeze and refreeze your credit report as you need to.

For Equifax

  • Online: Go to www.equifax.com and click the ‘Place a security freeze’ button.
  • By phone: Call 1-800-685-1111 to request for a freeze.  NY residents can call 1-800-349-9960.
  • By mail: Send a certified mail to request a credit freeze (see sample letter).  Take note of the documents you must include in the letter.
  • Use this address: Equifax Security Freeze, P.O. Box 105788, Atlanta, GA 30348.

For Experian

  • Online: Go to www.experian.com  and click the Security Freeze button.
  • By phone: Call 1-888-EXPERIAN (1-888-3973742).  Press “2” and follow the prompts for a security freeze.
  • By mail: Send a certified mail to request a credit freeze (see sample letter).  Take note of the documents you must include in the letter.
  • Use this address: Experian Security Freeze, P.O. Box 9554, Allen, TX 75013

For TransUnion

  • Online: Go to www.transunion.com/credit-freeze and click the Freeze My Credit button.
  • By phone: Call 1-888-909-8872
  • By mail: Send a certified mail to request a credit freeze (see sample letter).  Take note of the documents you must include in the letter.
  • Use this address: TransUnion LLC, P.O. Box 2000, Chester, PA 19016

When Should I Freeze My Credit?

As a safety measure, you should think of freezing your credit if a thief was able to steal your identity.  Even if it’s just a suspicion and you’re not certain that you were a victim, it is a good step to request a freeze on your credit file.  You accomplish two things when you do it:  first, you can prevent this type of theft and the ensuing financial consequences.  Second, you spare yourself from the stress that the crime can cause you.

You may also want to freeze your credit file if:

  • You’re getting bills or collection notices under your name or for another person who you do not know at your address
  • Somebody has stolen your credit card details in the past or you are a past victim of identity theft.
  • There are new inquiries on your credit report from entities that you did not provide permission to.
  • Your bank informs you about a fraud incident or attempt on your account.
  • You receive a legitimate company announcement where you are or could be a victim of a data breach.
  • You are not planning to apply for new credit anytime soon.

Credit Freeze: Pros and Cons

Yes, freezing your credit gives you extreme protection from identity thieves but there are still pros and cons for you to consider.  So, before you freeze your credit, look into these advantages and disadvantages:

Credit Freeze – Advantages

Here are the advantages of a credit freeze:

  • It puts up an extra level of protection to the open accounts under your name. Without your PIN number and additional security information, no one will be able to open an account in your name.
  • It has no negative impact on your credit score whatsoever.
  • You can still use your existing accounts or open new ones to take out loans, etc. However, some of these transactions will require you to unfreeze your account temporarily.
  • Your existing creditors can still access your credit report. So, if you want to ask for a credit card limit increase, you won’t need to worry about unfreezing your credit.
  • It is now free of charge – you don’t have to spend if you want a credit freeze.
  • You can still use your existing credit card accounts as usual.

Credit Freeze – Disadvantages

Here are the disadvantages of freezing your credit:

  • You have to lift the freeze to your credit when you want to apply for a credit card, mortgage or other financial product that require a credit check. The extra step is to go back to each credit bureau where you’ve frozen your credit to unfreeze it from each one of them.
  • It may affect your application for jobs, cellphone service or any other instances where the other party has to do a credit check because of the timing delay in unfreezing and thawing your credit.
  • It’s practically useless in case a criminal has already accessed your accounts.
  • It’s fundamentally inconvenient if you have an active financial life because of the freezing and unfreezing you have to do from time to time. Each time you want to allow someone to access your credit report, you need to lift your credit freeze.

Credit Freeze: What Are The Alternatives?

Going as far as freezing your credit is an extreme security measure for your credit report.  And it’s not all positive for you.  Here are some alternatives to consider:

Credit Freeze vs. Fraud Alert

A credit freeze is totally different from a fraud alert.  The former locks down your credit while the latter will give creditors access to your report provided, that they verify your identity.  Both credit freezes and fraud alerts do not stop identity thieves from using existing account – they only prevent them from opening new ones.  An initial fraud alert will protect your information for 90 days, and it is consumers who are concerned about identity theft but have not experienced it yet who often use it.

The new law also changes other provisions.  It extends an initial fraud alert (which is currently a free consumer protection service) from 90 days to 12 months.  Consumers who activate a 90-day fraud alert with Experian will see that their alert will automatically extend to one year from the date they initiated the alert.  And if you place a fraud alert at one of the three credit reporting companies, the other two companies will add the alert automatically on your account.

Victims of identity theft can request for a free, 7-year fraud alert which they call the “Victim Statement”.  They should, however, be able to provide a police report or other valid identity theft report.  Both alerts will warn lenders that the individual has been a victim of identity theft or fraud and encourage them to verify the identity of the individual before granting credit.

Credit Monitoring Services

Many companies who have fallen to hacking or data breaches would normally offer their customers a no-cost credit monitoring service for a certain period of time as a form of damage control.  But there’s no stopping you from spending out of your own pocket to sign up for a credit monitoring on your own just to have some peace of mind.

Services from LifeLock and Experian CreditWorks program work as a daily nanny of your credit report – but you have to pay for it.  If you don’t want to spend on paid monitoring, you can just settle for the three credit bureau’s report for free, if a yearly report is enough for you.

Credit Freeze vs Credit Lock

There’s a very big similarity between a credit freeze and a credit lock – both keep your creditors from accessing your credit file.  In the same way, to lock your credit, you need to lock your file with all three credit bureaus:  Experian, TransUnion, and Equifax.  The two differ in the way you can lock or unlock your credit file, plus how much it costs to do so.

The cool thing is, you can unlock your credit line through an app or online. With a credit lock, activating and deactivating it online or through a smartphone mobile app is quick and simple.  All it takes is a username and password.  With a credit freeze, the steps are more laborious.  You’ll need to go online, mail your request, or call the credit bureau then use your PIN to install, lift, or remove a freeze.

There is a monthly fee to lock your credit file with Experian.  This is a characteristic of a credit lock: you sometimes have to pay a monthly fee.  Experian’s website advertises a charge of $4.99 for your first month (and $24.99 for each additional month).  You might have to spend quite a sum if you intend to lock your account for a long time.  TransUnion and Equifax do not charge for credit locks.

When to Thaw Your Credit and How To Do it?

Take note of this important reminder:  After freezing your reports, thaw them first before you apply for new credit.

In the majority of the states, your credit freeze will stay permanently on your files if you don’t request for removal.  There are four states that automatically remove your credit freeze after seven years.  They are Kentucky, Nebraska, Pennsylvania, and South Dakota.

Thawing a credit report does not take long as it usually happens within minutes after you make the request online or by phone.  Except if you request by mail, which will take a longer time.  Although modern technology allows your credit to thaw almost in a flash, Experian suggests that you allow three days for your credit reports to thaw before you go and apply for new credit.  This is because, in some states, there could be laws that affect this.

Every credit bureau gives you the right to unfreeze your report permanently or temporarily.  This means that you can just thaw it for a day so you can apply for one particular credit card.  Or maybe take a whole month so you can shop for rates for a car loan or a mortgage.  Check if the credit bureau will allow you to thaw your credit in advance.

If your credit reports are still frozen and you already applied for a loan or credit card, the lender will not be able to access your reports or scores.  In all likelihood, they will deny your application.  The lenders cannot run hard inquiries to check the information in your credit files, which is something very integral in their approval process.

So, you’ll have to reapply again after a certain period but by then, you should time the thaw a little more accurately.

Bottom Line

Freezing your credit is an effective safeguard against identity theft that costs you nothing.  It makes it really hard for identity thieves to victimize you.

However, remember that it can be hard work to remove a freeze from all the three credit bureaus for each occasion that you need a credit check.  Before freezing your credit, make sure that it is the financial control that you really want to get into.