After the Equifax data breach, there have been quite a few questions (and some confusion) around how exactly a credit freeze works. For that reason, we’ve answered some of your most pressing questions below. If you are a real estate, mortgage or lending professional, whose clients are dealing with these issues, please feel free to contact us, or have them reach out to us directly, to answer any questions.

What Is A Credit Freeze?

A credit freeze restricts access to your credit report, such that it is difficult, if not impossible, for someone other than yourself, to apply for new credit in your name. A credit freeze does this by locking access to your report. 

By doing so, the chances that you will be a victim of identity theft, through someone applying for credit in your name, is considerably reduced. We’ve included more information below on how to arrange for a credit freeze. 

Does A Credit Freeze Affect My Credit Score?

No. A credit freeze does not impact your credit score, either positively or negatively. While it limits access to your credit reports (for future credit applications) anything which appears on your credit report today, will continue to count towards your FICO and VantageScore numbers, without any changes. This means your score won’t increase or decrease. 

During A Credit Freeze, Who Can Still Access My Credit?

When your credit is frozen, your existing creditors (for example, your credit card issuer), can still access your credit report. If they need to conduct an account review, that will still happen, just as it would have, prior to freezing your account. Also, government agencies might be able to access your credit reports, for a search warrant, subpoena or administrative order.     

Does A Credit Freeze Stop Collectors Or Creditors From Reporting Negative Items On My Credit Report? Does It Remove Negative Items From My Credit Report? 

No. A credit freeze does not stop collectors or creditors from reporting either positive or negative items on your credit report. Therefore, it is not a credit improvement solution, nor is it something which will eliminate or restrict your positive credit history. A credit freeze only restricts access to credit reports, and the procedures through which you apply for credit. Information which is reported to the credit bureaus will not change. 

How Do I Apply For Credit, During A Credit Freeze?

There are a few methods through which you can simply apply for credit, despite being in the midst of a credit freeze. You can lift the credit freeze temporarily, let’s say for a day or a week, during which time, you can apply for credit with any lender(s) you are interested in. This is a common choice for folks who are applying for credit with multiple lenders in a short period of time (such as when you are shopping for a mortgage or auto loan). 

If you don’t want to lift a credit freeze, you can also request that a temporary PIN be issued, which you’ll provide to the specific lender with whom you want to apply for credit, so that they can gain access to your reports.

Does A Credit Freeze End Prescreened/Promotional Offers (i.e. Soft Inquiries)? 

No. A credit freeze will not restrict prescreened offers, that is, those letters which inform you that you’ve been preapproved for a card, loan or insurance. If you don’t want to recieve such offers any offer, you’ll want to click here, to opt out of these offers. 

What Is The Difference Between A Credit Freeze And A Fraud Alert?

A credit freeze offers a deeper level of security with a fraud alert. With fraud alerts, a creditor is supposed to verify your identity, but outside of that, there is nothing per se restricting them from checking your credit. With a credit freeze, unless you lift the freeze, or provide a prospective lender with a PIN, it is impossible for them to run your credit.

If you are worried about fraud, you are allowed to place a free 90-day fraud alert with each credit bureau. Also, if you are a victim of identity theft, you are entitled to free fraud alerts for 7 years (of course, you are also entitled to a free credit freeze). You can place a fraud alert with TransUnion, Equifax and Experian, at the links included earlier. 

How Much Does A Credit Freeze Cost?

It’s free to freeze your TransUnion, Experian and Equifax reports at the enclosed links. Thanks to a federal law which was passed in 2018, freezing and unfreezing your credit is completely free.        

If I Place A Credit Freeze, Do I Need To Do So With All Three Bureaus?

Whether or not you need a credit freeze is in large part a personal choice (unless you’ve been a victim of identity theft, in which case we suggest freezing your credit). In our experience, monitoring your Equifax and TransUnion credit reports at Credit Karma, and your Experian report at freecreditscore.com is enough, since identity theft laws protect you, in the event you’re a victim of identity theft. Still, if you are more comfortable having your credit frozen, that’s what you should do. 

However, if you are going to freeze your credit, you should do so across all three credit bureaus. Different lenders often use different bureaus, so, if someone who stole your identity applies for credit with a lender who uses TransUnion credit reports, and you only froze Equifax, you aren’t protected. If you are going to freeze your credit reports, do so with all three bureaus.

Credit Freezes: The Final Word

Freezing your credit can be a very effective tool to safeguard your identity, and the security of your credit reports. It certainly isn’t neccessary, but it can be useful. Consider today whether a credit freeze makes sense for you.