Credit Freeze

A credit freeze is a restriction, requested by a consumer, that prohibits a nationwide credit bureau from disclosing the contents of that consumer's credit report to anyone who asks for it. Because most lenders will not extend credit without pulling a report, a freeze effectively blocks new accounts from being opened in your name.

The naming is worth clearing up, because you will meet both versions. Federal law calls it a security freeze, and the subsection creating it is headed "National security freeze" (15 USC 1681c-1(i)). The FTC's consumer material and ordinary usage call it a credit freeze. They are the same thing, and a call to a bureau will more likely use the statutory term. Note also that a credit lock is something else: a product bureaus sell or bundle, governed by their terms of service rather than by the statute, with none of the deadlines or protections below attached to it.

What a freeze does not stop is set out in the statute. 15 USC 1681c-1(i)(4) lists ten categories a freeze does not apply to, and a frozen file remains available to each of them: a person the consumer already has or had an account or contract with, its affiliates, agents and assignees, for the purpose of reviewing the account or collecting on it, with "reviewing the account" expressly defined to include "account maintenance, monitoring, credit line increases, and account upgrades and enhancements"; a collection agency acting under a court order, warrant or subpoena, and federal, state or local agencies, law enforcement and trial courts so acting; a child support agency; a federal or state agency investigating fraud or collecting delinquent taxes or unpaid court orders; prescreened credit and insurance offers; a file monitoring service you subscribed to; anyone providing you with your own report or score at your request; anyone underwriting insurance; anyone using the information for employment, tenant or background screening; and anyone verifying your identity for a purpose other than granting credit.

Read that list against what a freeze is usually taken to mean. It blocks new credit. It does not stop an existing card issuer reviewing your account, or a landlord screening you, or an insurer pricing a policy.

The deadlines are asymmetric, and the faster one is the lift. Under 1681c-1(i)(2)(A) a bureau must place a freeze free of charge within 1 business day of a request made by toll-free telephone or secure electronic means, or within 3 business days of a request by mail. Under (i)(3)(C) it must remove one free of charge within 1 hour of a telephone or secure electronic request, or 3 business days by mail. That one-hour figure is the answer to the standard objection that a freeze will get in the way when you actually want credit.

A freeze is permanent until you say otherwise. (i)(3)(A) allows a bureau to remove one only on the consumer's direct request or where it was placed due to a material misrepresentation of fact, and (i)(3)(B) requires written notice before a removal of the second kind. There is no expiry date, which is the clearest difference from a fraud alert.

Temporary removal is a statutory right, not a workaround. (i)(3)(E) provides that if a consumer asks for a temporary removal, the bureau must remove the freeze "for the period of time specified by the consumer". So applying for a mortgage does not require abandoning the freeze.

Three smaller mechanics that matter in practice. Within 5 business days of placing a freeze, the bureau must confirm it and tell you how to remove it and about your right to opt out of prescreened offers ((i)(2)(B)). If a third party asks for a frozen report in connection with a credit application and cannot get it, it "may treat the application as incomplete" ((i)(3)(D)), which is why a lender may simply stop rather than tell you what happened. And each bureau must maintain a webpage for freeze and alert requests that "shall not be the only mechanism" for making them ((i)(6)(A)), so telephone access has to remain.

A separate subsection covers children and protected adults. Under 15 USC 1681c-1(j), a representative may freeze the file of a protected consumer, defined as someone under the age of 16 at the time of the request or an incapacitated or protected person for whom a guardian or conservator has been appointed. If no file exists, the bureau creates a record for the purpose. Note this freeze is drawn more narrowly than the adult version: it blocks disclosure to a person requesting the report "for the purpose of opening a new account involving the extension of credit."

You contact each nationwide bureau separately, by telephone, on its website or by mail, and prove who you are. The bureau places the freeze, confirms it, and tells you how to remove it. When you want to borrow, you lift it, either entirely or temporarily for a period you specify. All of that is free, in both directions, and doing it does not affect your credit score.

A hypothetical example, and the timing is the point. Lucia calls one bureau's toll-free line on a Tuesday morning. The freeze has to be in place no later than the end of Wednesday, one business day later, and her written confirmation, removal instructions and notice of the prescreen opt-out right are due within five business days.

Three months later she is buying a car on a Saturday. She telephones and asks for a temporary removal covering the next three days. The bureau has to lift the freeze within one hour of that request, and it goes back on by itself when her stated period ends. Had she written a letter instead, both directions would have taken three business days, which is the difference between shopping that weekend and not.

Two things she still has to do herself. The freeze covers one bureau, so it has to be repeated at the others, and she needs to know which bureau her lender will pull.

Pros

• It is the strongest free tool against new-account identity fraud, because it removes the report a lender needs rather than merely warning them.
• Free to place, free to lift, and free to place again, by statute in both directions.
• It never expires, so it protects a file nobody is watching, and it is available for a child under 16 or for an adult with a guardian.
• Temporary removal for a period you choose is a statutory right, and the one-hour lift makes it workable when you are mid-application.
• Placing one has no effect on your credit score.

Cons

• It has to be done at each bureau separately, and repeated for each family member.
• Ten statutory exceptions mean it is narrower than "nobody can see my credit". Insurance underwriting, employment and tenant screening, prescreened offers and existing-creditor account reviews all continue.
• It does nothing about fraud on accounts you already have, which is a separate problem with separate remedies.
• A lender that cannot pull your file may treat your application as incomplete rather than explain, which turns a forgotten freeze into a mysterious rejection.
• You have to remember which bureau a given lender uses, or lift all three.