How to Freeze Your Credit, and Credit Freeze vs Fraud Alert

By
Harris
-
23

Key Points

  • A credit freeze stops lenders from pulling your credit report to open a new account, so an identity thief usually cannot open credit in your name.
  • Placing, lifting and removing a freeze has been free at Equifax, Experian and TransUnion since Sept. 21, 2018, and a freeze does not affect your credit score.
  • You must freeze your file at each of the three bureaus separately. A fraud alert, by contrast, is placed at one bureau, which must notify the other two.
  • A fraud alert does not block access to your report. It tells businesses to verify your identity first. An initial alert lasts one year; an extended alert for identity theft victims lasts seven years.
  • Parents and guardians can freeze the credit of children under 16 for free, and specialty bureaus such as ChexSystems and NCTUE offer their own freezes.

A credit freeze, also called a security freeze, locks down your credit report so that lenders cannot check it to approve a new account. Because most creditors will not lend without seeing your report, that makes it much harder for an identity thief to open a card or loan in your name. It is free, it does not hurt your credit score, and it stays in place until you lift it.

This guide explains how to place and lift a freeze and how it compares with a fraud alert and a paid credit lock, based on guidance from the Federal Trade Commission (FTC), the Consumer Financial Protection Bureau (CFPB) and the three nationwide credit bureaus. It is general education, not personal financial advice.

What is a credit freeze?

According to the CFPB, a credit or security freeze “prevents prospective creditors from accessing your credit file.” The FTC puts it more simply: while a freeze is in place, nobody can open a new credit account in your name, including you.

The FTC says anyone can freeze their credit report, for any reason, even if their identity has not been stolen.

Is a credit freeze free?

Yes. A federal law made credit freezes free nationwide starting Sept. 21, 2018, according to a joint FTC and CFPB consumer alert. Since then you can freeze, temporarily lift and permanently remove a freeze at each nationwide bureau at no cost. The same alert says you can get a free freeze for children under 16, and for a person for whom you are a guardian, conservator or valid power of attorney.

Does a freeze hurt your credit score?

No. The CFPB says security freezes “do not impact your credit scores in any way whatsoever,” and the FTC, Experian and TransUnion say the same. You can also still review your own credit files while a freeze is in place.

How do you freeze your credit at Equifax, Experian and TransUnion?

The most important rule is that a freeze is not shared. Experian says a freeze placed on your Experian report “is not automatically shared with other credit reporting agencies,” and Equifax and TransUnion tell consumers to contact the other bureaus directly. To be fully covered, you need to place a freeze at all three.

Each bureau lets you manage a freeze online through a free account, by phone or by mail:

  • Equifax: Create a free myEquifax account to place and manage a freeze online, or call (888) 298-0045. Equifax says placing, lifting and removing a security freeze is free.
  • Experian: Sign up for a free Experian account. Experian says you can freeze and unfreeze your file in real time online and no longer need a PIN. You can also call 1-888-397-3742 or write to Experian Security Freeze, P.O. Box 9554, Allen, TX 75013.
  • TransUnion: Create a free account in the TransUnion Service Center, or call 800-916-8800. TransUnion says adding or removing a freeze online or by phone typically takes effect almost immediately.

Federal rules set deadlines for the bureaus. According to the CFPB, a nationwide bureau must place a freeze within one business day of a request made by phone or secure electronic means, and within three business days of receiving a request by mail.

Because these accounts control access to your credit file, go to the bureau websites directly rather than through links in emails or texts (see our guide on how to spot a phishing scam), and give each account a strong, unique password, which password managers can help with.

How do you lift a freeze when you need credit?

You can lift a freeze temporarily for a period you choose, or remove it entirely, at no charge. The CFPB says a bureau must lift a freeze within one hour of a request made by toll-free phone or secure electronic means, and within three business days of receiving a mailed request.

The FTC suggests a practical shortcut: find out which bureau a lender, landlord or other company will use to check your credit, lift the freeze only at that bureau, and put it back once the credit check is done. Experian lets you schedule a “thaw” with start and end dates, TransUnion lets you schedule a lift up to 15 days ahead, and TransUnion advises waiting a few minutes after a lift before a lender pulls your report.

What does a freeze not do?

A freeze targets new credit. It does not shut down your existing accounts. The CFPB says that while a freeze is in place, a limited number of parties can still see your file, including creditors on accounts you already hold, certain government entities such as child support agencies, and companies you have hired to monitor your credit.

The CFPB also notes that the federal free freeze law does not apply to someone who requests your report for employment, tenant screening or insurance purposes. Experian’s own list of exceptions includes landlords screening you as a tenant, employers you have authorized to run a background check, debt collectors and companies sending prescreened credit offers.

TransUnion also notes that a freeze will not send you alerts, so it does not tell you when someone tries to use your information.

Credit freeze vs fraud alert: what is the difference?

A fraud alert is a lighter tool. According to the FTC, a fraud alert tells businesses to check with you before opening a new credit account in your name, usually by contacting you first. Unlike a freeze, it does not prevent businesses from seeing your credit report.

It is also easier to place. You contact just one bureau, and the FTC says that bureau must tell the other two. Fraud alerts are free, and you can add one even if you already have a freeze. Active duty service members can also use a separate active duty alert.

Initial fraud alert

Anyone who is, or suspects they may be, affected by identity theft can place an initial fraud alert. It lasts one year and can be renewed. Before Sept. 21, 2018, an initial alert lasted only 90 days. The FTC says that when you place an initial fraud alert, you can get a free copy of your credit report from each of the three bureaus.

Extended fraud alert

An extended fraud alert is for people who have experienced identity theft and have completed an FTC identity theft report at IdentityTheft.gov or filed a police report. It lasts seven years. The FTC says it also requires the bureaus to take you off their marketing lists for unsolicited credit and insurance offers for five years, unless you ask them not to.

What about a credit lock?

Credit locks are products sold or bundled by the bureaus themselves. The CFPB says credit reporting companies offer locks “for a fee, often bundled with other services you must pay for,” and that locks “are no more effective than security freezes, which are free and which you have a right to by law.” The FTC’s 2018 alert says locks work in a similar way but may carry monthly fees. Experian, for example, describes its CreditLock as part of a paid membership that adds alerts for suspicious inquiries, while its freeze is free.

Can you freeze a child’s credit?

Yes. The FTC says parents can request a free credit freeze for a child under 16, and it stays in place until you ask the bureaus to remove it. Under federal law, the CFPB explains, a parent or guardian can freeze the file of a “protected consumer,” meaning a child under 16 or an incapacitated person. If the bureau has no file on the child, it must create one so it can be frozen. That record cannot be used for credit.

The process usually involves mail. TransUnion says protected consumer freezes cannot be placed online or by phone because of the documents required, such as proof of your authority to act for the child and proof of both identities. Equifax uses a Minor Freeze Request form, and Experian accepts minor freeze requests by mail.

Should you freeze ChexSystems and NCTUE too?

ChexSystems keeps reports on consumers’ banking history. Its Consumer Portal lets you place or lift a security freeze, and it issues a PIN that is needed for actions such as a temporary lift.

The National Consumer Telecom and Utilities Exchange (NCTUE) keeps records of telecommunications, pay TV and utility accounts reported by its members, with consumer data managed by Equifax. NCTUE says you can place a free security freeze on your NCTUE report, and temporarily lift or remove it at no cost, through its consumer portal.

When does a freeze make sense?

The FTC calls a credit freeze “always a good idea” and says it is even more important if a data breach exposes your Social Security number or a thief misuses your information. Experian’s comparison suggests a fraud alert for people who suspect identity theft and plan to use credit in the coming months or years, since an alert does not block lenders. You can also use both. If your identity has already been stolen, the FTC’s IdentityTheft.gov lets you report it and get a personalized recovery plan.

The bottom line

A credit freeze is the strongest free tool most Americans have against new account fraud. It costs nothing, does not touch your credit score, and lasts until you lift it, but it only works if you place it at Equifax, Experian and TransUnion separately. A fraud alert is easier to place and keeps your report open while asking lenders to verify your identity, and an extended alert gives identity theft victims seven years of protection. For more on consumer finance and the economy, visit the LiveNewsWorld Markets Live center.

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