A credit freeze restricts access to your credit file, so most new creditors cannot see your report and new accounts are hard to open in your name. Since 2018, placing and lifting one has been free at all three nationwide bureaus, but it does not protect existing accounts.
What a Credit Freeze Does Not Protect
A security freeze restricts access to your credit file. When a freeze is in place, the bureau will not release your report to most new creditors, which in practice prevents new accounts from being opened in your name, because lenders will not approve an application they cannot underwrite. Since federal law changed in 2018, placing and lifting a freeze is free at all three nationwide bureaus, and each bureau must be contacted separately. Freezes must be placed promptly after a request and lifted promptly when you ask, which matters when you are applying for credit yourself.
The limits are frequently misunderstood. A freeze does not protect accounts that already exist. Someone with your card number can still make fraudulent charges on an open account, because no credit pull is involved. It does not stop tax refund fraud, government benefits fraud, or misuse of your medical insurance, none of which run through the credit bureaus. It does not prevent existing creditors, debt collectors working for them, or certain government agencies from accessing your file. And it is not a substitute for monitoring statements.
A freeze also differs from a fraud alert and from paid credit monitoring. A fraud alert asks lenders to take extra steps to verify identity but does not block access, and it expires. Monitoring services tell you after something has happened. A freeze is preventative and permanent until you lift it. The Federal Trade Commission’s IdentityTheft.gov walks through which combination applies to a given situation and generates a recovery plan.
References:
– Federal Trade Commission, What To Know About Credit Freezes and Fraud Alerts, consumer.ftc.gov
– Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018, free freeze provisions
– IdentityTheft.gov, Federal Trade Commission
– Consumer Financial Protection Bureau guidance on security freezes
Source: Federal Trade Commission
