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Thawing the Credit Freeze

Thawing the Credit FreezeA credit freeze occurs when a consumer requests that the consumer reporting agencies lock their data. It effectively stops any access to their credit report by potential lenders, and blocks any new issuance of credit. Individuals who freeze their credit reports must then “unfreeze” their credit before applying for any new credit themselves.

It may sound like a good idea, but there can be unintended consequences. You’re not always going to know when you’ll need access to your credit information. Renting an apartment, getting quick credit in an emergency, taking advantage of a one-time offer, or even getting a cell phone all require quick access to your credit report.

Locking and unlocking a credit report is time-consuming and could be costly. Any freeze-and-thaw system must be sufficiently secure to ensure that fraudsters cannot easily use it. This means it is more time-consuming and less convenient.

Fraud alerts can be an effective option if you are concerned about identity theft. They give you added protection without limiting your access to credit. Traffic accidents are a very common concern, but we continue to drive. A credit freeze is like throwing away the keys, while a fraud alert is like wearing a seatbelt.

The vast majority (73 percent) of reported identity theft involves the use of existing accounts and not the opening of new accounts, according to the Department of Justice. A credit freeze would not prevent criminals from using existing credit card and bank account information fraudulently.