Pros and Cons of Freezing Your Credit (2024)

FAQs

What are the disadvantages of freezing your credit? ›

A freeze can give you a false sense of security — you may still be susceptible to credit fraud or other fraud involving your Social Security number. A credit freeze won't affect your current accounts, but if a thief steals the information on an existing account, your credit may be used without your permission.

It's not foolproof: A credit freeze won't protect against existing account fraud or other forms of identity theft. You should still monitor your accounts regularly.

When the freeze is in place, you will still be able to do things like apply for a job, rent an apartment, or buy insurance without lifting or removing it. Duration: A credit freeze lasts until you remove it. How to place: Contact each of the three credit bureaus — Equifax, Experian, and TransUnion.

The Bottom Line

Freezing your credit card is a convenient and cost-free way to secure your account when you don't have access to your card or want to control your spending. However, if your card is lost or stolen, reporting it to the card issuer is the best way to protect your account from unauthorized use.

Does Freezing Your Credit Affect Your Credit Score? Freezing your credit report won't affect credit scores that are based on the report. A creditor might not be able to check your credit score during an application if it can't access your frozen report. However, the credit scoring models can still score the report.

Summary: Credit freezes and credit locks function similarly, but there are some differences. Both a credit freeze and a credit lock can help prevent unauthorized access to your credit reports. Credit freezes are always free, but credit locks may be a part of a paid service offered by a credit monitoring service.

Placing a freeze on your credit means that no one can access your information to fraudulently open a new account in your name.

With a security freeze, your credit reports cannot be accessed (with some exceptions) to open new credit unless you temporarily lift or permanently remove the credit freeze.

A security freeze can help prevent identity theft, because businesses will not open credit accounts without first checking a consumer's credit history. If your credit files are frozen, even someone who has your name and Social Security number probably will not be able to obtain credit in your name.

Credit bureaus are not happy about freezes as it prevents them from profiting on your information. Don't be fooled by credit monitoring (Lifelock) or passive security "locks" that falsely claim to be better -- demand a security "freeze" which is legally mandated.

What to do after freezing credit? ›

To remove a credit freeze from your account, contact the credit bureau where you've had your credit frozen. You may do this online, by phone or by mail. Read about how to unfreeze your credit with Equifax, Experian and TransUnion.

System errors, file mixups, data breaches, or even identity theft may be why your credit is frozen without you initiating it.

No. Some payments will still be completed, for example: Payments that are processed by a retailer, such as on a plane or road toll.

If I have a pending transaction when I freeze my card, will the transaction be paid? Yes. Transactions which have already been authorised will clear. It is only from the point that the lock is put in place that a initiated transaction will be declined.

In most cases, getting a card lock in place only stops new purchases—recurring transactions like subscription charges or monthly bills can still go through. If you want to set or lift a credit card freeze, log into your online credit card account or use your credit card issuer's mobile app.

A freeze doesn't affect your credit score or prevent you from accessing your own credit report. Your accounts remain open, so it's a good idea to keep monitoring your bank and credit accounts for signs of fraud.

A credit freeze, also known as a security freeze, is the best way to help prevent new accounts from being opened in your name. It's absolutely free to freeze, unfreeze and temporarily lift a freeze on your credit, and it won't affect your credit score.

Disadvantages of freezing include the initial investment for equipment — it costs a great deal to buy and maintain a freezer. Also, the size of the freezer limits the amount of storage space, and the freezing process gives some foods an undesirable texture.

Although an agreed payment holiday is not recorded as a missed payment, it will usually appear on your credit report and this could affect your credit score.