A credit freeze can prevent a criminal from accessing your credit report if you are worried about identity theft. If there has been a data breach that concerns you, or you are afraid that someone has gained access to your credit report without your permission, having a credit freeze placed on your report might be helpful.
What is a Credit Freeze?
A credit freeze is also known as a “security freeze.” It allows you to place restrictions on your credit report, making it more challenging for identity thieves to open new accounts in your name. A credit freeze on your account prevents thieves from opening new accounts using your information because creditors must see your report before approving a new account. In other words, if creditors cannot see your credit report, they will not approve a new credit account.
Does a Credit Freeze Affect Credit Score?
Fortunately, a credit freeze does not affect your credit score. Additionally, a credit freeze does not do the following:
- Prevent you from getting a copy of your free annual credit report
- Prevent you from opening a new account, renting an apartment, purchasing insurance or applying for a job. However, it’s important to keep in mind that if you are doing any of the above activities, you must temporarily lift the credit freeze for a specific amount of time, or for a particular party, such as a potential employer. Time and cost to lift a credit freeze vary, so be sure to check with the credit reporting company before doing so.
- Prevent an identity thief from making changes to your existing accounts. However, you must still monitor all of your bank, credit card, and insurance statements to ensure that there are no suspicious transactions
Does a Credit Freeze Stop Pre-Screened Credit Offers?
A credit freeze does not stop pre-screened credit offers. If you want to stop getting these offers, however, you will have to either go online at OptOutPrescreen.com to opt out or call 888-5OPTOUT (888-567-8688). Both the website and phone number are run by the national credit reporting agencies. You can choose to opt out of receiving pre-screened credit offers for five years or even permanently if you prefer. Keep in mind that some companies send offers that aren’t based on pre-screening, so opting out will not stop those offers.
Even if you are considering opting out of pre-screened offers, you should know that they can offer plenty of benefits, especially if you might want to buy new insurance or sign up for a new credit card. They give you the opportunity to learn about what is available so that you can compare products and compare costs. You are also turned down on a very limited basis because you have been pre-selected to receive such offers. When you get pre-screened offers, their terms are typically better than those offered to the general public. Some credit cards or insurance may even only be available through pre-screened offers.
Can Anyone See a Credit Report if it’s Frozen?
Some entities will still be able to see your credit report after it is frozen. It can be released to your current creditors so that they can collect a debt or to debt collectors when certain creditors use them. Government agencies can also have access to a credit report that is frozen in response to a subpoena, search warrant or court or administrative order.
In some states, a credit freeze expires after seven years, but in others, it stays until you request a temporary lift or remove it. If you request a free be lifted, a credit reporting agency must oblige no more than three business days after receiving your request.
What’s the Difference Between a Credit Freeze and Fraud Alert?
A credit freeze will lock your credit. A fraud alert lets creditors get a copy of your credit report if they ensure verifying your identity. A fraud alert can also help to stop someone from opening a new account in your name, but it doesn’t necessarily prevent your current accounts from being misused. You must still monitor your bank, credit card and insurance statements carefully.