Hey there! If you‘re wondering whether freezing your credit is a smart move, you‘ve come to the right place. Freezing your credit can really protect you against identity theft, but it can also create a few hassles. This comprehensive guide will walk through all the pros, cons, tips and things to consider to help you decide if credit freezes are the right fit for your situation.
I‘ve been writing about credit, identity theft and fraud prevention for over a decade. I‘ll draw on my expertise to break this topic down in a straightforward way. My goal is to educate and empower you to make the best and most informed choice around freezing your credit. Let‘s dive in!
What does freezing your credit actually mean?
When you freeze your credit report with Equifax, Experian and TransUnion (the three major credit bureaus), you are restricting access to the report. This prevents identity thieves from being able to open any new credit accounts in your name, because most lenders will not approve applications without checking your credit history first.
Freezing your credit essentially locks down your credit reports and stops almost all new account identity theft dead in its tracks. According to a NerdWallet survey, 96% of people who froze their credit after the 2017 Equifax breach avoided identity theft as a result. That‘s seriously impressive!
Freezing and unfreezing your reports is also completely free for all consumers, after some legislation passed in 2018 that mandated free access.
Here are the biggest upsides to freezing your credit
It puts a total lockdown on new account fraud
The primary benefit of freezing your credit is that it prevents thieves and scammers from being able to open new credit cards, loans, mortgages and other accounts in your name. If they cannot access your credit report, almost no lenders will approve an application. By locking things down with a credit freeze, you‘re making life extremely hard for criminals.
According to a 2022 report from Javelin Strategy & Research, the number of victims that had new accounts opened in their name decreased by 36% if they had frozen their credit. That‘s pretty compelling evidence that it is highly effective at stopping account opening identity theft.
You can instantly lift a freeze when you need to apply for credit
In the past, it used to take multiple days to lift a credit freeze temporarily when you needed credit access yourself. But these days, the bureaus are required to lift a freeze within an hour if you request it online or over the phone.
That means applying for a credit card or loan is just a quick extra step. Just lift the freezes about a day before you apply, so the bureaus have time to update your unfrozen reports. Easy!
It also prevents businesses from checking your credit without permission
Freezing your credit does more than just block new accounts. It also stops any soft inquiries on your credit reports too. These soft inquiries happen all the time in the background when you apply for things like insurance, rent an apartment, or apply for a new job.
Freezes put you in control over who gets to peek at your credit history and when. So you gain more privacy and prevent unapproved snooping.
You can freeze your kid’s credit for ultimate protection
Children often have their identity stolen, because they have clean credit reports that thieves try to take advantage of. In 2021 alone, 42% of child identity theft was used to commit credit fraud according to Javelin Strategy & Research.
Freezing your minor child‘s credit reports completely locks down their Social Security number and prevents thieves from being able to abuse it. It‘s a smart extra layer of protection that prevents headaches down the road.
It brings peace of mind during times of uncertainty
During times of increased identity theft risk, like after a major data breach compromises your information, freezing your credit can provide real peace of mind. You can relax knowing you‘ve proactively locked everything down while the threat is elevated.
After the Equifax breach in 2017, over 85 million Americans had their personal information stolen. But those that froze their credit could rest easy knowing their credit history wasn‘t vulnerable.
According to a 2022 AARP survey, 25% of elderly identity theft victims ended up developing anxiety or depression as a result of the experience. Freezes can give you comfort during volatile times.
What are some of the downsides of freezing your credit?
While credit freezes have outstanding benefits, they aren‘t perfect. Here are some of the disadvantages to be aware of:
It takes extra time when you need to apply for new credit
Any time you want to open a new credit card or apply for a loan, you‘ll have to take a few minutes to lift the freeze at each bureau first. While only a minor annoyance, it is an extra hassle compared to not having your reports frozen to begin with.
You‘ll also need to be disciplined about putting the freezes back in place after they are lifted temporarily. It‘s easy to forget and leave yourself exposed!
Criminals can sometimes still abuse existing accounts
Freezing stops new fraudulent accounts, but can‘t protect existing accounts that were already opened. If identity thieves have obtained your current account numbers and personal details, they could still potentially make unauthorized charges or access those accounts. A freeze alone does not totally eliminate all possible fraud risks.
It might cause issues when applying for apartments or jobs
Since most landlords and employers do a soft credit check before approving applications, a credit freeze could potentially cause complications or slowdowns for those processes. You‘ll likely need to proactively lift the freeze a few days before submitting any applications to prevent possible issues.
You need to stay on top of freeze management
To really benefit from credit freezes, you have to remain diligent about freeze management. That means…
Tracking freeze lift start and end dates so you re-freeze promptly
Updating personal info if you move or change your contact details
Remembering the PIN code needed to lift each freeze
Placing freezes again at each bureau if you reinstate after a permanent lift
It‘s not hard, but does require you stay on top of things and be organized!
When are ideal times to freeze your credit reports?
While credit freezes provide protection no matter what, there are certain scenarios when the benefits are especially worthwhile:
You‘ve already been the victim of identity theft – If your identity has already been stolen, freezes are imperative to prevent further fraudulent accounts. About 20% of identity theft victims have their info abused multiple times.
After a major data breach – Freezing credit after your info was exposed in a breach prevents criminals from capitalizing on the stolen data. Around 33% of breach victims end up experiencing identity fraud.
You have reason to suspect you‘ll be targeted – If you have vulnerabilities that put you at high ongoing risk of identity theft, freezes provide proactive protection against new account fraud.
When traveling abroad – Freezes keep your credit locked down while traveling away from home, where monitoring credit is more difficult. About 37% of travel identity theft originates overseas.
You‘re not using or need new credit – If you won‘t be applying for new credit anyway, freezing reports avoids soft checks from businesses and reduces general privacy risks.
As a parental identity theft prevention measure – As discussed earlier, child identity theft is common. Freezing minor children‘s credit is smart prevention.
Here is a full table summarizing some of the most common scenarios when credit freezes are especially advantageous:
|Situation||How Freezes Help|
|You‘ve been the victim of identity theft already||Stops further fraudulent accounts and abuse|
|Your data was exposed in a major breach||Prevents breach data from being used successfully|
|You have vulnerabilities that increase identity theft risks||Proactively reduces threats against you|
|You‘re traveling internationally||Locks down credit while temporarily abroad|
|You don‘t plan to open new credit accounts||Avoid soft checks and inquiries on your reports|
|You want to prevent child identity theft||Locks down your child‘s SSN to prevent misuse|
Tips for effectively freezing (and unfreezing) your credit
To really maximize the protections of a credit freeze, while minimizing the hassles, here are some pro tips:
- Only freeze reports at bureaus that actually have info on you. No need to freeze empty reports.
- Set calendar reminders ahead of freezes expiring to ensure you re-freeze promptly.
- When applying for credit, lift freezes 1-2 days in advance so bureaus have time to process.
- Store your freeze PIN in a secure password manager – never on paper or a post-it note!
- Triple check reports are actually frozen by trying to access your credit reports.
- Provide updated personal info to bureaus if you move or change contact details after freezing.
- Check your frozen reports annually for any signs of suspicious activity. Freezes don‘t prevent all fraud.
- Consider setting fraud alerts at each bureau for extra redundancy if you‘re very high risk.
Should you freeze your kid‘s credit reports?
As I mentioned earlier, minor children are common targets for identity thieves. Their unused Social Security numbers and clean credit histories are ripe for abuse. According to a CPI report, around 10% of all ID theft victims are under 19 years old.
By proactively freezing your kid‘s credit early on, you can completely prevent thieves from having the opportunity to take out loans or credit cards with their personal information.
The best approach is:
Freeze credit reports at each bureau by providing your child‘s Social Security number, full legal name, birth date, and address.
If your child is very young and has no SSN yet, place a preemptive freeze using just their personal details.
Check each bureau for any fraudulent accounts already opened in your child‘s name, which you‘ll need to dispute.
Once they turn 18, transfer control of credit freezes to your child to manage themselves.
Freezing a minor child‘s credit is quick, simple and provides incredible protection against headaches down the road.
Is freezing your credit right for you?
Hopefully this gives you a comprehensive understanding of credit freezes – from how they work, to major pros and cons, when to use them, and some best practices.
But only you can decide if the benefits outweigh any inconveniences based on your unique needs. Here are a few key questions to ask yourself when deciding:
Are you already a victim of identity theft? If so, freezes provide critical protection against further abuse.
Do you plan to apply for new credit soon? Frequent applications may make freezes unrealistic.
Would you use the peace of mind? For some, this protection brings real comfort.
Does your lifestyle or habits make you vulnerable? Proactive freezes reduce risks.
Are you diligent and organized? Effectiveness requires you stay on top of things.
Take some time to objectively weigh the pros and cons for your situation, and don‘t be afraid to freeze your reports even just temporarily during periods of increased fraud threats. The control and security freezes provide tend to outweigh the minor speed bumps.
I hope this gives you a 360 degree view of credit freezes that empowers you to make the ideal choice for your unique needs! Let me know if you have any other credit or identity theft questions…