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Credit Freeze

By Credit Factor Editorial Team | AI-assisted, human-reviewed

What is a Credit Freeze?

A credit freeze, also known as a security freeze, is a tool that typically
restricts lenders, creditors, and other third parties from accessing your
credit report. When a freeze is in place, most new creditors generally cannot
review your credit file, which means they may be unable to approve new lines
of credit, loans, or other financial products in your name.

Why It Matters for Your Credit

A credit freeze is one of the strongest protections available against identity
theft. Because most lenders require a credit check before approving new
accounts, a freeze may stop a thief from opening fraudulent accounts using
your personal information, even if they have obtained your Social Security
number or other sensitive data. Importantly, a freeze does not affect your
existing accounts, your credit score, or your ability to request your own
credit report.

Under federal law, specifically the Economic Growth, Regulatory Relief, and
Consumer Protection Act of 2018, placing and lifting a credit freeze is
generally free of charge at all three major credit bureaus: Equifax, Experian,
and TransUnion. You may place or remove a freeze at any time, and the process
is typically completed within one business day when requested online or by
phone.

Practical Example

Suppose your personal information is exposed in a data breach. By contacting
each of the three major credit bureaus and requesting a freeze, you may
prevent anyone from using that stolen data to open a new credit card or loan
in your name. When you are ready to apply for credit yourself, such as for a
car loan, you can temporarily lift the freeze, allow the lender to run their
check, and then reinstate the freeze once the process is complete.

A Note on Credit Locks

Credit freezes are different from credit locks, which are typically offered as
paid or app-based services through individual bureaus. Credit freezes carry
stronger legal protections and are generally the recommended option for
consumers concerned about identity theft.

Sources