Credit Freeze

A new lender commonly checks a credit file before approving an account, and with a freeze in place, a lender that cannot obtain the report will usually be unable to complete that application. This protective barrier can work before a fraudulent new account is opened, rather than merely alerting the victim afterward.

A freeze can be placed even without evidence of identity theft, and it does not hurt the consumer's credit score, which still depends on account activity, balances, history and the scoring method, not on the act of freezing access. In the United States, a person can request a free freeze separately from each of the three nationwide credit reporting companies, and freezing at one company does not automatically freeze a file held by another.

Keep the confirmation and instructions for lifting each freeze in a secure place. A person planning to apply for a mortgage, card or other new credit may need to lift the relevant freeze temporarily, and the lender can say which reporting company it expects to use, though it may check more than one.

Allow for the processing time described by the reporting company rather than waiting until a closing deadline. Some entities can still see the file in permitted circumstances, including creditors of existing accounts, and US federal freeze rules also treat some employment, tenant-screening and insurance requests differently from new-credit checks.

Do not interpret a freeze as a universal ban on every person seeing a report. Existing card numbers, online banking credentials and payment accounts remain exposed to their own risks.

A thief who already has access to an account might make an unauthorised transaction even when new credit is blocked, so review statements and report suspicious activity to the relevant provider promptly. The Consumer Financial Protection Bureau distinguishes free security freezes from credit locks that may be sold with paid services, so read the contract before paying for a lock or identity-protection bundle, because a paid feature is not necessarily stronger than the free statutory freeze.

A fraud alert is also different: in the US, it asks creditors to take identity-verification steps when checking a report, while a freeze restricts the release of the file for many new-credit purposes. A person might compare both tools based on the risk and upcoming applications.

Credit monitoring is another separate tool, because it can notify someone of changes that have appeared on a report but does not itself stop a lender from accessing the file. Freeze, alert and monitoring can complement one another, but none replaces checking active accounts.

A freeze is not a correction process, so if an account is inaccurate, dispute the entry through the reporting company and information provider using the appropriate evidence. A locked file can still contain a bad record once it becomes available to an authorised requester.