What Is a Credit Freeze? Should I Freeze My Credit? (2024)

What happens when you freeze your credit is simple: no one can access yourcredit report, including you, until you unfreeze it. More specifically, a “frozen” credit reporting agency is barred from releasing yourcredit reportto anyone except your existing creditors or a government agency with a court order, a subpoena, or a search warrant.²

I had acted relatively quickly after the breach to freeze my credit, following a flurry of research that taught me the benefits of a credit freeze, plus:

• The main downsides to freezing credit,
• That freezing credit wouldn’t hurt mycredit score, and
• Best of all, credit freezes are free – by law, as of September 2018,³though not all online sources have caught up with this fact. (My freezes were also free, because the big three credit bureaus offered them free following the headline-making breach.)

Finding the survey by Fundera/Wakefield Research stating that nearly one in five people froze their credit really floored me. In the two years since I froze my credit, I had yet to run into anyone else who had answered “yes” to the “Should I freeze my credit?” question. So, for me, that one in five Americans with frozen credit didn’t sound possible.

So, I decided to do my own informal survey. I sent 160 emails to a selection of friends and LinkedIn connections, asking “Have you ever frozen or locked your credit?” and a handful of follow-up questions about why or why not, and their experience if they had. I received 59 responses.

Iwas wrong – my results corroborated the Fundera-Wakefield finding. And floored me for a second time. The detailed responses, you see, exposed that so many people still are terribly confused about credit freezes. In brief:

• 18 people (31%) froze their credit – so my associates froze at a higher rate (nearly one in three) than the original survey’s one in five.
• But 41 (69%) did not, of which 13 (22%) had never even encountered the concept of a credit freeze, much less asked whether or not they should freeze their own credit!
• Another 13 of the non-freezers used some form ofcredit monitoring,including credit locks.
• 5of my respondents were victims of identity theft.
• 9 people (15%) made clear in written comments that they were confused about what a credit freeze is, its purpose, and how it differs from the various forms ofcredit monitoring, alerts, and locks.
  

My survey results also agreed with consumer advocates who say thatpreventing identity theftis more than worth the hassle involved in freezing your credit. Two of the identity theft victims in my survey told stories in which fraudsters put a hold on their U.S. Postal mail so that they could order and interceptcredit cardsfor new accounts in the person’s name. In another case, a fraudster submitted a tax return requesting a large refund in my friend’s name, and only by sheer luck – he decided to file his real return early that year, leaving the IRS with two conflicting documents – did he avoid years of hassle and potential criminal charges.

As long as you keep careful, secure records of your passwords and PINs, the downsides of freezing your credit are, essentially, nuisance-level. What had shocked me in my survey results was that so many people incorrectly thought that a credit freeze would somehow make it difficult for them to use their own existing accounts, such as theircredit cards! Not true. Perhaps it should be called a “new credit freeze” because by closing off access to yourcredit report, credit freezes effectively prevent new accounts from being created. Your existing accounts are unprotected.

But that does lead to the first of four downsides:

• Acredit freeze doesn’t help protect against fraud aimed at your existing accounts. You still need to be vigilant in checking those accounts to make sure you made all the transactions.
• Some people consider it a hassle, because you have to contact each of the three major credit bureaus individually. And even if you freeze each of the big three, there are many small and specialized credit bureaus – it was through one of these that an identity theft was perpetrated against one of my survey respondents.
• Like everything else in life, a credit freeze offers no 100% guarantee.
• You’ll need to temporarily unfreeze if you want to get a new credit card, mortgage or, like me, lease a car. This is where the “careful, secure password and PIN records” come in handy. I temporarily unfroze my credit twice, each time in a single-digit number of minutes, whereas many of my respondents spent hours or days on this task. (For more detailed information, see “How to Unfreeze Credit for Free.”)