Should I Freeze My Credit?

Blog Post

2 min read

Pink piggy banking frozen in a block of ice.

A healthy credit history can unlock more than a great rate on a new loan. Your credit profile can influence where you live, the car you drive, whether you land your dream job, and how much you pay for auto insurance. If you have a history of paying bills on time and keeping credit account balances low, you’re on track to establishing good credit.

But credit fraud could damage what’s taken years to build, all in a matter of minutes. A fraudster could steal your data and use it – along with your good credit – to open new accounts. If you suspect a crook has gained access to your private information, a credit freeze could protect your credit from further damage.

What is a Credit Report Freeze?

A credit report freeze prevents lenders, companies, and other credit-based entities from accessing your credit history report for the purpose of issuing new credit in your name before checking with you first. It’s a free service that helps to protect your credit data from theft and fraud by letting you control who can access your report and when. To freeze your credit profile, you must contact the major credit reporting bureaus, Equifax®, Experian®, and TransUnion®. You can remove and re-apply the freeze at your convenience.

Credit Report Freeze Pros and Cons

A credit report freeze allows you more control over who has access to your data. However, you must weigh this benefit against your other financial goals. For example, if you’re planning to shop for a mortgage, lift your credit freeze ahead of time so lenders can access the information they need to pre-approve your application and finalize loan funding.

Pros

The freeze still gives you the freedom to:

View your credit profile
Shop around for insurance
Use credit monitoring services
Apply for a job that requires a credit review
Pass housing rental screenings that need a credit check
Request a credit line increase from a current lender or creditor

Cons

While your goals and situation will determine the downsides of a credit freeze, consumers should know a credit freeze doesn’t stop:

Debt collection calls
Credit card companies from sending pre-screened credit offers
Governmental or state agencies from accessing information for specific legal purposes

Your decision to freeze or unfreeze your report doesn’t affect your credit score, but it impacts your ability to quickly open a new credit account. However, this inconvenience can be overcome by planning ahead.