credit freeze
A security measure that prevents new credit accounts from being opened in your name without your explicit permission.
Example
“After the data breach she placed a credit freeze at all three bureaus to prevent fraud.”
Memory Tip
FREEZE — lock your credit file. Nobody can open new accounts without your permission.
Why It Matters
A credit freeze is crucial for protecting yourself from identity theft and unauthorized credit applications. If a criminal obtains your personal information, they cannot open new accounts in your name without your permission, which can save you from significant financial damage and years of credit repair work.
Common Misconception
Many people believe a credit freeze will hurt their credit score, but this is incorrect. A freeze does not affect your credit score at all and does not prevent you from using existing credit accounts or applying for credit yourself when you lift the freeze temporarily.
In Practice
Suppose your social security number is compromised in a data breach. You immediately contact the three major credit bureaus and place a credit freeze on your accounts. When a thief attempts to open a credit card or take out a loan using your information, the lender cannot access your credit report without your PIN code, so the application is rejected and your identity remains protected.
Etymology
Modern identity protection term — freezing access to your credit file.
Common Misspellings
Check your credit score free — no impact
Related Terms
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