Credit Freeze

Full definition

A credit freeze (formally called a security freeze) blocks third parties from pulling your credit report to issue new credit. The freeze does not affect your existing accounts, your credit score, or your ability to use credit you already have - it only prevents new credit from being opened. When to use: If your Social Security number or financial data has been compromised in a data breach or identity theft incident. As a precautionary measure if you are not planning to apply for new credit for months or years. For children (you can freeze a child's credit file to prevent identity theft before they are old enough to use credit). Free by federal law: The Economic Growth, Regulatory Relief, and Consumer Protection Act (2018) made credit freezes free to place and lift at all three major bureaus (Equifax, Experian, TransUnion). There is no fee and no limit on how many times you can freeze and thaw your reports. How to freeze: Contact each bureau separately online, by phone, or by mail. You receive a PIN or account access that you use to lift the freeze later. The freeze is effective immediately when placed online. Lifting a freeze for a loan application: When applying for a personal loan, lift the freeze at all three bureaus before applying (most personal loan lenders pull all three). You can lift it permanently or temporarily (for a specified number of days). Temporary lift is safer if you only need it for one application cycle. Freezes vs locks: 'Credit lock' is a marketing term some bureaus use for a paid service that works similarly to a freeze but may have different legal protections. The free statutory credit freeze has stronger legal protections under federal law.

• Hard credit inquiry
• Credit report
• Credit score