Understanding Frozen Credit Lines

Most people don’t realize this but they can place what’s called a “freeze” on their credit lines. A credit freeze can be placed by the holder of the credit line (depending on where you live – some states do not allow credit freezes). Credit freezes are not particularly common, and are primarily designed to protect victims of identity theft and fraud. Read on for more information on credit freezes.

If you decide you want a credit freeze, and you live in a state that allows them, what you’re doing is essentially concealing your credit report from people you don’t want to see it, and that’s primarily new creditors who are hoping to offer you new credit cards. A credit freeze will not block your current creditors, such as your current credit card companies, from seeing your payment activity.

Credit freezes will prevent not just would-be creditors from seeing your credit report, but also landlords who are checking on you before agreeing to rent you their house or apartment. A credit freeze will also block anyone who might be considering giving you a loan, such as an automobile dealer or a bank.

If you decide you want to place a credit freeze on your credit report, you will need to do so by contacting each credit bureau – you cannot get a blanket credit freeze to cover all the credit report agencies. So, when you contact the big credit bureaus, such as Equifax, Experian, or TransUnion – each credit bureau will have their own policies on the credit freezing process, so be sure to follow all their rules. The same steps will be required when you want to lift your credit freeze, which is often referred to as “unthawing.”

To learn more about frozen credit lines, credit freezes, credit reports, identity theft, and other issues concerning credit, be sure to consult with a financial advisor.