A credit freeze, also known as a security freeze, is a tool that allows individuals to control how a consumer reporting agency (also known as a credit bureau) is able to sell personal financial identity data. When a credit freeze is in place, creditors cannot access an individuals credit report, which means they wont be able to open a new credit account in their name, whether it is fraudulent or legitimate. Credit freezes are frequently viewed as the most effective way to prevent financial identity theft.

Here are some key points to know about credit freezes:

• Who can place one: Anyone can freeze their credit report, even if their identity has not been stolen.
• What it does: A credit freeze restricts access to an individuals credit report, which means they or others wont be able to open a new credit account while the freeze is in place.
• Duration: A credit freeze lasts until an individual removes it.
• Cost: Placing, lifting, and removing a security freeze is free.
• How to place: An individual must contact each of the three credit bureaus (Equifax, Experian, and TransUnion) to place a credit freeze.
• How to lift: An individual must contact each of the three credit bureaus to lift a credit freeze. The process can be done online, by phone, or by mail. The time it takes to lift a freeze varies depending on the method used.
• Entities that can see an individuals file while a freeze is in place: Creditors of accounts an individual currently holds, certain government entities like child support agencies, and companies that an individual has hired to monitor their credit file.
• Effects on applying for credit: Individuals who freeze their credit reports must unfreeze their reports before they wish to apply for credit themselves. However, this can be avoided with proper preplanning. With proper documentation, most individuals should be able to unfreeze their credit scores with all three bureaus within 15 to 20 minutes.

Its important to note that a credit freeze wont send alerts, but an individual can log in at any time to see their freeze status. Additionally, a credit freeze wont affect an individuals credit score.