We’ve all heard credit financial jargons like credit freeze or security freeze. So, we tend to ask ourselves, what is credit freeze? A credit freeze lets an individual control how their U.S. financial identity information is allowed to be released by credit bureaus.
Freeze prevents bureaus from releasing the personal information of the individual. Credit freeze protects the identity of the person. However, this credit freeze is not permanent but can be removed whenever the person wants to.
Credit lock services also let you do the same thing but there is a fundamental difference between credit locking and credit freezing. We will dive deep into this difference soon.
Learning the benefits of freezing your credit and how you can take advantage of it, in case of a terrible identity theft situation is better. If you are here seeking for the credit freeze tips and tricks, you are the right place. Without much further ado, let’s see the basics of freezing and locking credit.
What happens when you freeze your credit?
Freeze basically protects your personal information from identity thieves. Identity thieves try to steal your personal information and open credit accounts by your name. In order to prevent this, authorities allow consumers to put a credit freeze if they think that their personal or financial information is vulnerable. A credit freeze won’t affect your credit score.
When you have a freeze on your credit report, lenders will not be able to access your report for legitimate reasons too. Creditors who don’t already have your credit report data cannot get access to your report because of the freeze.
So, if you are planning to open a new credit card, make sure to unfreeze your credit report before applying. Otherwise, it will result in a credit card denial situation.
What Does A Credit Freeze Do?
What is credit freeze? The term “credit freeze” is an effort to keep consumer’s credit card accounts safe so that identity thieves can’t get a hold of any personal information. Technically, a freeze gives consumer authority to control access to their report.
When scammers try to use your information and apply for a credit account, the lenders must verify identity by checking credit. When they can’t see any credit information, they can’t approve the application of credit account opening by scammers. Basically, a pin code Is used to unfreeze your credit.
This process is done by getting in contact with all three credit bureaus mentioned below
What Is The Difference Between Credit Lock And Credit Freeze?
What is the difference between a credit lock and a credit freeze? They are used for one similar purpose. So, the sole purpose is to restrict access to your personal information and credit reports.
A credit lock and a credit freeze are comparable services that denies access to your personal credit profile for potential lenders. Although both services help you get the same benefit, to restrict credit report access, the primary difference between a credit lock and credit freeze is the method invoked for locking or freezing your credit and the difference in cost.
The only difference between credit lock and credit freeze is that there is no cost to freeze your credit where as you need to pay to lock your credit.
What is credit lock?
With a credit lock, you can lock and unlock your credit report on-demand at any time with your phone or PC. A credit lock performs similar role to credit freeze by helping you restrict access to credit report.
Generally, credit lock comes with an additional cost that you need to pay every month to keep your credit secure. For example, Experian has CreditLock product that helps user protect their credit profile on demand. It is under Experian IdentityWorks and CreditWorks hierarchy of products.
CreditLock service helps you lock or unlock Experian report on real time, with no PIN or password to remember. Also, they have a convenient mobile app to access it on the go from your mobile.
Also, remember Credit lock is an add-on product that is not necessary for everyone. If you are paranoid about losing your personal information and resulting in an identity theft situation, then it is good to go for credit lock.
The ease of Credit lock along with its instant real time actions create so much trust and is well worth its cost for some people.
What is credit freeze?
Federal law grants you the right to request credit freeze or security freeze without any cost.
Security freeze helps to provide a solid firewall around your credit report and help regulate access to it. As a result, it also helps in protecting you from identity-theft or credit fraud.
If you decide to work with Credit Bureau and place credit freeze on your credit report, you can expect a personal identification number/password back from them. So, make sure to write the PIN safely down somewhere and do not lose the PIN. This is what will identify you to the Credit Reporting Agencies when you place a request to lift credit freeze. There is no fee to freeze and unfreeze your file.
Remember, the security freeze request needs to go to each Bureau separately and it will not happen in real-time.
Equifax Lock and Alert
You can use the Equifax lock and alert app to lock your Equifax credit report. Freezing credit Equifax is free of cost. If you are applying for a credit account opening and your credit report is locked. You can simply go to the app and unlock it with just a single swipe. Equifax will alert you whenever your credit report is locked or unlocked.
Experian Identity Works Plus
Like Equifax, Experian Identity Work Plus lets you control restriction of your credit report with their app. Freezing credit Experian is free for 30 days and then $9.99/month. This will also monitor other credit bureaus as well. Experian will alert you whenever your credit report is locked or unlocked.
TransUnion True Identity
TransUnion True Identity lock will protect your identity against scammers and identity thieves. You can lock and unlock your credit reports with a single swipe. They will alert you whenever your credit report is locked or unlocked. Freezing credit TransUnion is free of cost.
|Equifax Lock and Alert||Experian Identity Works Plus||TransUnion True Identity|
|Cost||Free of cost||$9.99||Free of cost|
|Credit Bureau Coverage||Monitors only Equifax credit bureau.||Equifax, TransUnion, and Experian credit bureau reports are monitored deeply and carefully.||Monitors only TransUnion credit bureau.|
|Automatic Montoring For False Crimes||It does not alert you if your name is used in false crime reporting.||If your name is used in false crime reporting. Experian will alert you.||It does not alert you if your name is used in false crime reporting.|
|Free Trial||Not applicable||Offers 30 day free trial||Not applicable|
|SSN Monitoring||Extensive SSN Monitoring available||Deep SSN Monitoring feature available||Comprehensive SSN Monitoring available|
Pros Of Freezing Credit Report
- The reason why people freeze their credit report is that they know that if they do this then it will protect them from identity theft. It is a good practice for everyone to do this because it helps you in protecting yourself from all sorts of identity theft
- Freezing Credit protects you from fake accounts people make after stealing your personal information
- Don’t worry, it won’t affect your credit score
- Freezing credit report won’t charge you
- Credit Freeze doesn’t expire
- It gives you the relaxation of the mind that your credit report information is being protected
- You can still use your credit
Cons Of Freezing Credit Report
- Freezing your credit report does not offer you 100% guaranteed protection
- It won’t stop hackers from hacking into your account after the freeze is put in place
- Credit freeze won’t stop anyone from using your credit or debit card number
- You will have to contact each credit bureaus separately and freeze each credit report separately
- If you applied for a loan, car, or a home mortgage, the lender would need to check your credit report. So the lender won’t be able to check until you lift the freeze. And then it would delay your payments
How To Freeze Credit For Free?
I guess reading the pros and cons may have given you the best of both worlds and help take an informed decision.
Follow these steps to get your credit frozen for free
- Contact credit bureaus either by phone or you can also contact them online
- Visit Equifax official website or call them at 1-800-685-1111
- Go to Experian official website or call them at 1-888-397-3742
- Visit TransUnion official website or call them at 1-888-909-8872
- Moreover, each credit bureau will want you to verify your identity
- After verification of your identity, they will send you a pin code
- So, write down that pin or save it because you will be needing this pin for unfreezing
- Soon after, bureaus will follow up and freeze it, at no cost to you
How Long Does Credit Freeze Last?
Credit freeze lasts until you decide to unfreeze it. The best thing about freezing credit is that you will not have to worry about when this will expire. And, It usually takes up to an hour for lifting the freeze. You can lift the freeze by either calling respected bureaus, or mailing them, or doing it online. The freezing decision never expires, unless you decide to end it. Both freezing credit and unfreezing won’t cost you any money.
Can I Use Existing Credit Cards In Spite of Freezing Credit Report?
You can use your existing credit cards even when you have the freeze is currently on. You will be able to use your credit card where access to your credit reports are not required. For example, If you have applied for a loan and your lender needs to check your credit reports. So in that case you will have to lift the freeze. You will not be able to apply for a new account if you have frozen your credit reports.
How Do I Unfreeze My Credit?
It is not difficult to revoke a frozen credit. It is really simple.
Follow these steps to unfreeze your report access by contacting the respective bureau.
- Visit Equifax official website or call them at 1-800-685-1111.
- Go to Experian official website or call them at 1-888-397-3742 or 1-888-EXPERIAN.
- Visit TransUnion official website or call them at 1-888-909-8872.
- They will ask you to provide them the Personal Identification Number (PIN) or password they gave you earlier while freezing it.
- When you provide them the correct PIN, your freeze will be lifted in an hour.
Is Freezing Credit A Good Idea?
A credit freeze protects your credit reports from exposure to identity thieves. Credit freeze only protects credit reports from three major credit bureaus. Credit freeze and credit lock do the same thing but are different in terms of method of protection.
A credit freeze won’t impact your credit score. It will protect you from identity thieves. But, it won’t protect you against potential hackers who would want to use your account or credit card for illegal transactions in the future. But, what does credit lock mean? It means controlling the freeze in real-time and helps you gain more control over your credit.
Finally, Freezing and unfreezing credit is free of cost. You can freeze or unfreeze your credit by contacting respected credit bureaus. But, freezing is not useful for everyone. It is a helpful product when you are unfortunate victim to identity theft. But, otherwise, you don’t have to worry about keeping your credit frozen always.
Does Credit Freeze Hurt Your Credit Score?
It may sound like it prevents any thing from happening with respect to credit, but that is not entirely true. Freeze doesn’t mean that you cannot utilize credit services. Moreover, you can continue to use your credit products like credit cards or loans as usual.
All your loan payments and credit card payments continue to be reported to Credit Bureau normally. So, remember credit freeze does not mean information freeze on lender reporting timely payments to Credit Reporting Agencies. Just make sure to monitor your credit, as usual, on a regular basis.
Your credit score will not stay stagnant because of a credit freeze. It will change based on the new data reported in your credit profile by the lenders. So, building positive info will help you get a good credit score. Initially, it is better to start slow and set small goals like increasing credit score by 100 points.
Making timely payments, keeping a low credit utilization ratio and having good credit mix can help you get even excellent credit score. If your credit score is not going up after taking these steps, you may want to engage get a professional help with credit repair services.
New lenders who wish to get your data will not be able to do so with the freeze. So, any new credit card application will result in a denial since the potential lender can’t gauge your credit trustworthiness. Remember to unfreeze your credit report before applying for new ones.
I am a data analyst by profession who loves to crunch numbers at daytime and come home wondering how my passive income numbers for the day look like. I believe in being rich rather than looking rich. Follow me for Cryptocurrency, FIRE, Personal Finance, Credit Cards and Digital Nomad updates