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Beginner’s Guide: What is a Credit Freeze?
The digital age has brought ease to so many aspects of our lives, but it’s also created large databases of our personal information. If you haven’t been affected by one of these data breaches, you’re one of the lucky ones. For those of us who have received that dreadful notification that your data has been compromised…a credit freeze could help bring you peace of mind. Let’s get into what a credit freeze accomplishes, how to add one to your credit report, and of course manage it through new legitimate inquiries.
What is a Credit Freeze?
Simply, a Credit Freeze is a tool used to restrict access to your credit report. It’s something that can be easily done and will certainly help you if you’ve had any issues with Identity Theft, Fraud, or other issues pertaining to the security of your credit.
A credit freeze can also be advantageous if you’ve had a lot of hard inquiries on your credit report with a certain bureau, but not others. We’ll get into the specifics, but those inquiries may negatively affect your ability to secure new lines of credit even though you’re a solid borrower.
What does a Credit Freeze do?
- Prevents new inquiries into your credit from that credit bureau
- Stops applications dead in their tracks because credit can’t be pulled from the bureau of which you’ve frozen your credit.
Do I have to freeze my credit with all credit bureaus?
NO – there are 3 credit bureaus or reporting agencies ( Equifax, Transunion, and Experian) and they must be done individually.
- You can freeze one, two, or all reports. Fees may apply, but usually it’s free charge.
- Each of the 3 Credit Bureaus need to be frozen individually. Sometimes people have a lot of credit inquiries with one specific reporting agency. They could have applied for a lot of credit cards, or their identity was stolen and numerous accounts were fraudulently opened as a result. They can freeze that report while it heals.
- There are mixed reports that Bank of America and Chase will pull a different report if one is frozen. YMMV, but it’s worth asking, otherwise you’ll have to get a code or do a “temporary thaw.”
- Each of the 3 Credit Bureaus need to be frozen individually. Sometimes people have a lot of credit inquiries with one specific reporting agency. They could have applied for a lot of credit cards, or their identity was stolen and numerous accounts were fraudulently opened as a result. They can freeze that report while it heals.
Can I still apply for a new credit card?
- Yes, you can still apply for a new credit card. In the instance that the application is stopped by a credit freeze you can verify your identity with the credit agency and get a security code so that the bank can still pull your credit. You will save money by “thawing your credit” for that specific credit agency
- Bank of America and Chase will sometimes agree to pull other credit report
How hard is it to unfreeze or “thaw” my credit.
You can manage your credit freeze quite easily online, or if you’d like to speak to someone, they can assist you over the phone. You will need to provide your name, address ( this may be current as well as prior addresses), your date of birth, Social Security number, and perhaps other information that assists in the verification of your identity. Also be prepared to create a pin that will be used for future alterations to your credit freeze whether permanent or temporary.
- By law, they must unfreeze within 3 business days.
Why would I freeze my credit
- Identity Theft: this will help with fraudulent applications. While it will make applying for new credit more tedious, it’ll also safeguard the inquiries.
- A lot of recent inquiries:
- Usually the bureau that your credit report is pulled from is based on the state you live in. Let’s say that’s Equifax. If you’ve applied for a lot of cards, then you may have a ton of inquiries on Equifax, but your Transunion report may be clear or have only a couple hits. You could freeze Equifax and when you apply for a card say that your Equifax is frozen and could they pull from Transunion. This will help you out when it comes down to Hard Inquiries in your report and increases your odds for approval. If they won’t do it, you can either say forget about it, or get them an access code.
- This is particularly useful for credit card companies like Barclay or BofA which may be more strict on application approval depending on how many inquiries you’ve had.
- Usually the bureau that your credit report is pulled from is based on the state you live in. Let’s say that’s Equifax. If you’ve applied for a lot of cards, then you may have a ton of inquiries on Equifax, but your Transunion report may be clear or have only a couple hits. You could freeze Equifax and when you apply for a card say that your Equifax is frozen and could they pull from Transunion. This will help you out when it comes down to Hard Inquiries in your report and increases your odds for approval. If they won’t do it, you can either say forget about it, or get them an access code.
Who can still access my credit report?
There are situations and instances where your credit can still be accessed. So who can access your credit in the midst of a freeze?
- You can! You can still get your free annual report
- You current creditors
- If you currently have a credit card from Chase, Chase can access your credit in regards to those existing accounts, but your freeze would be in effect if you were to open a new line of credit
- Any debt collectors
- Utility companies may be able to in order to establish a security deposit on equipment
- Child Support agencies
- Certain Government agencies in regards to court orders or warrants
How can I freeze my credit?
Each of the three main credit reporting agencies maintain credit freeze pages where you can establish a freeze or manage a freeze.
Equifax: You can Freeze your credit here
- Phone: 1-800-349-9960
Experian: You can freeze your credit here
- Phone: 1‑888‑397‑3742
Transunion: You can freeze your credit here
- Phone: 1-888-909-8872
Overall
We are living amidst some historic times, and anything you can do to protect your credit score or position yourself is well worth doing. In fact, I just had someone send me a quick thank you note in regards to a credit freeze helping out. 6 separate credit inquiries had been blocked in the past couple of months.
Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.
Chase Sapphire Preferred® Card
Welcome Offer
Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening.
Annual Fee
$95
Points Earned
Transferrable Chase Ultimate Rewards
- 5x on all travel purchased through Chase Travel℠
- 3x on dining, including eligible delivery services for takeout & dining out
- 3x on select streaming services
- 3x on online grocery purchases
- (excluding Target, Walmart and wholesale clubs)
- $50 Annual Chase Travel Hotel Credit via Chase Travel℠
- The begins immediately for new cardmembers and after your account anniversary for existing cardmembers
- 2x on all other travel
- 10% Anniversary Bonus
- Every year you keep the card, your total spend will yield a 10% points bonus. If you spend $10k in a year, you’ll get 1k bonus points
- Chase Sapphire Preferred continues to redeem at 1.25c in the Chase Travel℠ and the slew of other benefits remain in tact including Auto Rental Collision Damage Waiver ( primary ), purchase protections, etc.
- Points are transferrable to 14 Ultimate Rewards partners
- Redeem in Chase Travel℠ for 1.25 cents per point
- No foreign transaction fees
- Suite of Travel and Purchase Coverage
- Auto Rental Collision Damage Waiver is my favorite
- Get complimentary access to DashPass which unlocks $0 delivery fees and lower service fees for a minimum of one year when you activate by December 31, 2027.
- $95 Annual Fee
We keep an up to date spreadsheet that lists the best ever offers: You can find that spreadsheet here.
Historically 80k is a very, very good offer and hit in both 2022 and 2023. In 2021, we saw the offer hit an all time high of 100k. Who knows if that will ever come back.
Main Cast:
Cards that earn flexible points and should be used on the bulk of your purchases.
Supporting Cast:
Cards that earn fixed points in the currency of the airline/hotel and can not be transferred at attractive rates. These cards yield benefits that make it worth keeping, but not necessarily worth putting a lot of your everyday spend on.
The Chase Sapphire Preferred® is exceptional starter card and offers transferrable Ultimate Rewards, and pairs well with other Chase cards.
If you carry this card alongside Chase’s cashback cards like the Chase Freedom Flex® and Chase Freedom Unlimited® or the business versions: Ink Business Cash® , Ink Business Unlimited® you can combine the points into Preferred account and transfer into hotel and airline partners
Annual fee is quite low at $95 a year + you get a 10% anniversary bonus on points + $50 hotel credit in Chase travel.
The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved, or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.