A credit freeze, also called a security freeze, limits access to your credit report. Freezing your credit can prevent accounts from being opened in your name and may help protect you against fraud. However, having frozen credit can be inconvenient, as it adds more steps to applying for new credit.
Here, we’ll explore how credit freezes work and the pros and cons.
How to freeze your credit
To freeze your credit, you’ll have to contact each of the 3 major credit bureaus and request a freeze. You can do this online, by phone or by mail. The exact steps may vary by bureau.
In general, you may have to set up an account with the credit bureau, log in or establish a password or PIN. You may be asked to provide personal details, like your Social Security number and date of birth, to freeze your credit.
You should get confirmation once your credit is frozen with each credit bureau.
How credit freezes work
Credit freezes prevent lenders from running a hard credit check by limiting access to your consumer credit report. A hard credit check or inquiry happens when a lender checks your credit report to make a lending decision, which can impact your credit score. This doesn’t prevent soft inquiries, which is when you check your own credit report. Credit bureaus are still able to share your credit report with people and companies requesting it for reasons other than opening a new account, too. So, you can still get pre-qualified offers in the mail, and if you’re starting a new job or renting an apartment, your new employer or landlord should be able to check your credit.
Credit freeze vs. fraud alert
A credit freeze is different from a fraud alert. Placing a fraud alert requires lenders to check with you or otherwise verify your identity before opening an account in your name. Fraud alerts are time-bound (an initial fraud alert lasts one year, and you can choose to renew it) and don't limit access to your credit report. Unlike credit freezes, you only need to set a fraud alert with 1 major credit bureau – they will automatically notify the others.
Pros of freezing your credit
Freezing your credit can reduce the risk of identity theft. Plus, it’s free and doesn’t impact your credit score.
Helps prevent new account fraud
Credit freezes prevent lenders from running a hard credit check, which can help keep scammers from opening new accounts in your name.
If your information is leaked in a data breach, for example, you might decide to freeze your credit. Loan applications – fraudulent or not – may be pended or automatically denied at the credit-check stage because lenders are unable to access your credit report.
No impact on your credit score
Freezing your credit doesn’t have any impact on your credit score. However, your credit score can still change over time and will reflect your behavior as a borrower. So, things like making on-time payments can still help improve your score while missing a payment or using a large percentage of your available credit can lower it.
It’s free
You can freeze your credit with all 3 major credit bureaus for free. It's also free to unfreeze (or thaw) your credit whenever you want.
Available for minors and dependents
Freezing your child’s credit can help prevent synthetic identity fraud, which commonly targets children. This type of identity theft combines a person’s details, such as their Social Security number, with falsified information to create a new identity.
If you decide to freeze your child’s credit, you may need to provide proof of identity for both you and your child.
Cons of freezing your credit
Freezing your credit can make it less convenient to apply for new credit. It also doesn’t protect you from all fraudulent activity.
Requires action across all 3 credit bureaus
Unlike a fraud alert, freezing your credit requires you to interact with all 3 major credit bureaus. You’ll have to freeze or unfreeze your credit with all of them. The process may vary from bureau to bureau. If it’s your first time interacting with a credit bureau, you may have to create an account to freeze your credit, too.
Temporary unfreezing can be inconvenient
If you want to apply for a loan, you may need to unfreeze or “thaw” your credit, at least temporarily. Otherwise, you may run into issues during the application process. (Keep in mind that companies evaluating non-credit applications, like for jobs and apartment rentals, can still access your credit report while your credit is frozen.)
It can take anywhere from a few moments up to 3 business days for a credit thaw request to go into effect, depending on how you request it. You can typically request a thaw over the phone, online or by mail.
Doesn’t stop fraud that’s already happened
Freezing credit can only help protect you against future fraud – not fraud that’s already happened. And, identity thieves and scammers may still be able to gain access to existing accounts if they have your information, regardless of whether your credit is frozen. Monitoring your accounts for suspicious activity can help you catch fraud early.
Reasons to freeze your credit
Freezing your credit can be a smart way to help protect yourself from fraud and identity theft. It may also make sense if you don’t need to apply for credit in the foreseeable future and want to be proactive about protecting your credit. If you have children or elderly relatives, freezing their credit can help protect them as well.
Unfreezing or thawing your credit is similar to freezing your credit. You go through each of the 3 major credit bureaus and call, log in or mail your request to unfreeze your credit. You may have the option to request a permanent lift or a temporary one. With a temporary thaw, you may be able to specify on which dates you want your credit report to be accessible.
Can you apply for the Costco Anywhere Visa® Card by Citi with frozen credit?
Let’s say you’re ready to apply for the Costco Anywhere Visa® Card by Citi, but your credit is currently frozen. Applying for a new credit card requires a hard credit check, so you’d have to first thaw your credit, either temporarily or permanently.
