When, Why & How to Freeze Your Credit Report

What Is a Credit Report?

A credit report is a historical document that typically records your name, possible addresses where you’ve lived, and the history of any loans and credit cards—opened or applied for—you’ve had attached to your name and/or Social Security number. Your credit report also keeps record of the most recently reported balances on your loans and credit cards along with your payment history.

Other things you may find on your credit report include current and past employer information, any old debts that have been sold to collection agencies, and public record liens, foreclosures, bankruptcies, and civil suits or judgments.

While there are many credit bureaus that generate credit reports, three commonly used credit bureaus are Equifax, Experian, and TransUnion. Some lenders and businesses report to all three of these credit bureaus, and some report to only one or two of them.

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How are Credit Reports Used?

Lenders might use your credit report to help them decide if they will loan you money, extend a line of credit to you, what your interest rate will be, and if you continue to meet the terms of a loan or credit card agreement you’ve already entered. Cable TV providers, cell phone providers, and utility companies might also check your credit report before letting you create a new account for service or deciding what deposit you might have to pay. Some employers may check your credit report before deciding to extend you a job offer as well.

Your credit report can affect every area of your life and is a more important piece of identification than you may realize.

Why Would You Need to Freeze Your Credit Report?

Some lenders report to the credit bureaus every 30 or 45 days. If you see inaccurate information on your credit report, like a late payment or incorrect balance, you can dispute it with the credit bureaus. However, they are times where you may need to freeze your credit. Freezing your credit won’t affect your current accounts, but it can help you control how new accounts are opened. Here are the most common reasons to freeze your credit.

Reduce the Chance of Identity Theft

If you fear an unauthorized person knows your social security number, you might want to freeze your credit to reduce the chance of identity theft. Freezing your credit can prevent them from opening a new loan, credit line, or other account using your information. When lenders and businesses run your credit report using your social security number, the system they’re using will alert them to the freeze and prevent them from seeing your credit history.

Prevent Credit Card Marketers from Spamming Your Mail

Freezing your credit can prevent lenders from seeing your credit report. If lenders can’t see your estimated credit score, they’re less likely to spam your mailbox with credit card offers. You’ll have to unfreeze your credit to get more credit card offers and before you apply for a new credit card or loan.

Prevents You from Impulsively Opening New Accounts

If you’re an impulse shopper, freezing your credit report can slow down how quick you are to open a new store credit account. Even if you call the credit bureau while you’re at the cash register, the store won’t be able to run your credit until after your credit report has been unfrozen. If you call a credit bureau or login to its website, unfreezing your credit report can take approximately 20 minutes to one hour based on the FTC’s guidelines.

It’s an Unlimited, Free Way to Keep Your Credit Secure

Freezing your credit report is 100 percent free with all the credit bureaus. A credit freeze doesn’t have an expiration date, so you’ll know that your credit is secure until you unfreeze it. There’s also no limit to how many times you can freeze and unfreeze your credit report. Unfreeze your credit report just long enough for you to get approved for a mortgage loan and freeze it back so you don’t have to worry about it. Freezing your credit report won’t affect your credit score, and you’ll still be able to use your existing accounts while it’s frozen.

Are there Negative Aspects of Freezing a Credit Report?

Although there are some benefits to freezing your credit report, there are also some disadvantages of doing so. Some negative aspects of freezing your credit report are:

• You must contact each credit bureau whenever you want to freeze and unfreeze your credit report. You’ll need to unfreeze your credit report whenever you want to apply for a loan, a new line or credit, or an account that requires a credit check.
• To unfreeze your credit report, you must verify your password or PIN that you set up with the credit bureau. If you lose track of the PIN, there’ll be other identity verification methods you must complete before unfreezing your credit report.
• Freezing your credit report doesn’t prevent thieves from accessing your existing accounts. If someone already has your credit card details or social security number, freezing your credit report won’t stop them from fraudulently using them.

When Should You Freeze Your Credit Report?

You should freeze your credit when you believe your identity has already been compromised. If you lose your social security card or another document that shows your full social security number, you might want to freeze your credit as a precaution for identity theft. If you receive a fraud alert that your data has been leaked in a company breach, you might want to freeze your credit until you can set up other security mechanisms to protect your credit file.

How Do You Freeze Your Credit Report?

You can freeze your credit by reaching out to the relevant credit bureau(s) or setting up an online account with their websites. To freeze your credit with Experian, Equifax, or TransUnion:

• Experian: Call 1-888-EXPERIAN (1-888-397-3742) or visit the Experian freeze center.
• Equifax: Call 1-800-349-9960 or visit Equifax’s website.
• TransUnion: Call 1-888-909-8872 or visit TransUnion’s website.

Freezing your credit is completely free and does not affect your credit score. A credit freeze can help protect your financial identity, and you can unfreeze it for free whenever you’re ready to do so.