Is Freezing Your Credit the Best Way to Prevent Fraud?


With breaches making headlines in the past year, you have probably heard experts advise people whose identities have been stolen to freeze their credit. Since no one wants their identity stolen, you may have wondered if this is good general advice to prevent identity theft as well. The answer — it depends.

What exactly does freezing your credit mean? 

The term is a bit of a misnomer since your credit isn’t actually frozen, rather your credit reports are frozen. You can still use your credit cards like you normally would and make payments as usual. However, when your credit is frozen, lenders cannot access your credit report to make decisions about letting you open new accounts or lending you money. This effectively means that no new credit can be opened in your name while your credit is frozen.

What are the downsides of freezing your credit?

The biggest downside is that you can’t just open a new account on a whim, which means no taking advantage of a promotion for a store credit card. Each time you want to unfreeze your credit, you have to contact each credit bureau and prove your identity using a PIN provided when you froze your credit, which can take a few hours or a few days.

On the surface, this may not seem like a big deal, especially if you keep credit cards to a minimum. But credit reports are run for other reasons as well — setting up utilities in a new home, starting a new job or even getting a new cell phone contract. You will need to unfreeze your credit for each one of these events and, to avoid delays or outright rejection, you should remember to do so in advance.

In some states unfreezing your credit costs more than just your time. If your identity has been stolen, you can typically have any fees related to unfreezing your credit waived by providing documentation of the theft. However, if you freeze your credit as a precaution you are charged a fee in some states, typically $3 to $10, each time you unfreeze your credit. If you are married, you will likely need to freeze both partners’ credit with all three agencies and fees can add up quickly if you want to unfreeze it.

Finally, freezing your credit does not protect you from all forms of theft. It only protects you from having new accounts opened in your name. Thieves can still gain access to existing accounts and rack up charges.         

So, when should you freeze your credit?

If you have been a victim of identity theft, you may want to seriously consider freezing your credit. The costs to start and end the security freeze could be waived if you have filed a police report. Because thieves sometimes steal children’s identities, some experts also recommend freezing your children’s credit. The youngest reported identity theft case was a one-month-old. Check your state’s laws before attempting to freeze your child’s credit. This is less of a hassle because your child is not likely to be applying for a job or opening a credit account at the hardware store — at least not anytime soon. If these scenarios don’t apply to you, when asking whether you should freeze your credit, the answer is “maybe.” You need to weigh the costs, both financially and hassle-wise, against the amount of peace of mind it will bring you. And, ultimately, the right answer may be different for you than someone else.