Pros and Cons of Freezing Your Credit (When To Freeze)

Are There Downsides To Freezing Your Credit? 

A credit freeze offers one of the best ways to protect yourself against financial fraud — especially if you’ve been the victim of identity theft or your personally identifiable information (PII) has been leaked in a data breach. 

That’s because scammers can use stolen or leaked data to apply for new credit accounts, credit cards, or lines of credit in your name. A credit freeze effectively prevents this from happening. 

With over 1.3 billion victims of data leaks in 2024 alone, most people are better off having a credit freeze in place at all times. 

When you consider the pros and cons of freezing your credit files, the only real downside is that it’s a manual process — so “unfreezing” your files adds extra steps when you do need to apply for credit, such as for a mortgage, new credit card, or auto or personal loan. But the upsides far outweigh these small hassles.  

🤔 Was your data leaked in a data breach? Use Aura’s free data breach scanner to find out →

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Should You Freeze Your Credit? What You Need To Know

What is a credit freeze? A credit freeze (sometimes also called a security freeze) is a service offered by the three major credit bureaus — Experian, Equifax, and TransUnion. After proving your identity with each of the bureaus, they’ll “freeze” your credit file, effectively preventing anyone from accessing it until you “thaw ” your file by using the provided PIN. A credit freeze is free and won’t impact your credit score. 

How long does it take? When you contact the credit bureaus via phone or online, they must enact your freeze request within one business day. If you submit a freeze request via mail, it can take up to three business days. You can lift the freeze at any time — either permanently or temporarily — to apply for new credit. 

How does a credit freeze protect you against credit fraud? When you (or someone else) requests new credit, financial services or card issuers review your credit file for information on your creditworthiness. This can determine if you get approved for new credit as well as the interest rate for which you qualify. But when your credit is frozen, they can’t run these checks and won’t be able to approve the credit application. 

Here’s a step-by-step explanation of how a credit freeze can help protect you from fraud:

• Your personal data is leaked in a data breach or you fall victim to a phishing scam, which exposes your sensitive information — such as your name, address, phone number, date of birth, or Social Security number (SSN). 
• Scammers then use your personal information to impersonate you and apply for new loans or credit cards in your name. 
• When lenders run credit checks, they’re blocked from seeing your credit history due to the credit freezes in place. 
• In most cases, this is the end of the process, and the scammer is shut down. However, some risky lenders use alternate sources or don’t check credit history at all, which makes credit monitoring services an important safeguard against fraud.

What about a “credit lock”? 

Another option is what’s called a credit lock. Each bureau has its own credit lock service — some are paid and some are free — which allow you to instantly lock and unlock your credit file. Aura’s mobile app even allows you to instantly lock and unlock your Experian credit file when you’re on the go. 

While a credit lock can be faster and more convenient than a freeze, it isn’t always free. Plus, the convenience of locking and unlocking your credit may cause you to accidentally leave it unlocked and vulnerable to fraud. 

📚Resource: Credit Lock vs. Credit Freeze: Which One Is More Secure? →

Pros of Freezing Your Credit

Mounting fears of political instability and major staffing changes at the IRS could lead to some severe downstream issues come tax season, potentially exposing more Americans to the risk of fraud. The Federal Trade Commission (FTC) published a consumer alert in January 2025, encouraging consumers to consider freezing their credit as a protective measure.

Here are four benefits of freezing your credit:

• Prevents scammers from accessing your credit file. While a credit freeze won't stop scammers from fraudulently using your current credit or debit cards, a preventive approach can stop them from opening new ones. When your credit is frozen, identity thieves cannot open new accounts in your name even if they have your personal information, as creditors cannot access your credit report without your explicit permission.
• Credit freezes are free and won't impact your credit score. Since 2018, the Federal Trade Commission (FTC) has ensured that all three major credit bureaus (Equifax, Experian, and TransUnion) are required by federal law to provide free credit freezes. These protective measures have no effect on your existing credit score or history.
• Can act as a point of friction if you're trying to limit your debt. A credit freeze requires you to temporarily lift the freeze before applying for new credit, creating a deliberate pause in the process that can help prevent impulsive borrowing decisions and promote more thoughtful financial choices.‍
• Offers peace of mind during major data breaches. When large-scale data breaches occur, a freeze helps you avoid long-term repercussions — as your credit files are already secured against unauthorized access, even if your personal information has been compromised.

Cons of Freezing Your Credit

While a credit freeze offers great protection against the ubiquitous threats of fraud and hacking, there are some downsides. 

A few of the cons of freezing your credit include: 

• You can't access your credit file or apply for new credit. When your credit is frozen, legitimate applications for credit cards or loans require you to temporarily lift the freeze. While most freezes will be lifted in hours, this block can still cause delays in securing your line of credit when you need it right away.
• Requires contacting all three bureaus. To establish complete protection, you must individually freeze your credit with all three bureaus and manage different PINs for each one.
• Doesn't protect you against other forms of identity theft and fraud. Credit freezes only prevent new accounts from being opened, offering no protection against fraudulent charges on existing accounts — nor does a freeze prevent scammers from using your identity and SSN for tax fraud (or during arrests).
• Could cause increased insurance rates. In several states, including New York, if you don't unfreeze your credit reports when applying for insurance, the score could come back as a "no hit," and you could be treated as if you have no credit history. Independent insurance agent Jill Roth explains that this could result in higher premiums because you wouldn't earn any discounts for having a good score. 
• Some risky lenders may not check your credit with the main bureaus. Some lenders, particularly payday loan companies, use alternative credit reporting agencies not affected by standard credit freezes, leaving vulnerabilities in your protection.

Pro tip: You can also place freezes with smaller consumer credit agencies that fraudsters use to take out payday loans, like ChexSystems and LexisNexis. Other options include contacting subprime credit reporting agencies, such as Teletrack, Factor Trust, and DataX.

How To Freeze Your Credit With All Three Bureaus

Anyone can set up a credit freeze on their credit files, even if they don’t have an official identity theft report or proof that their identity or credit is at risk.

To place a credit freeze, you must contact each of the three main credit bureaus individually — either online, or via phone or mail. You’ll be asked to provide proof of your identity, such as an official ID, SSN, and documentation of your current address. You’ll then be given a PIN to use when you want to “thaw” your credit file. Each freeze lasts until you lift it. 

Here’s how to contact each bureau:

If you’re the parent or guardian of a minor (up to age 16) or incapacitated adult, you can set up a freeze for them, providing you have the required documents, like the child's birth certificate, Social Security card, and proof of legal guardianship. 

📚 Related: Why Is My Credit Frozen If I Didn’t Freeze It? →

How To Protect Yourself If You Can’t Freeze Your Credit

While a credit freeze can stop scammers from opening new accounts, it’s crucial to realize that this security measure isn’t foolproof. Scammers can access your current accounts, use your identity for other forms of fraud, and do serious damage — even if they can’t access your credit file. 

One credit fraud survey found that an estimated 62 million Americans had fraudulent charges on their credit or debit cards in 2024, with unauthorized purchases topping $6.2 billion. 

Here are five ways to stay safe along with a credit freeze:

• Sign up for a credit monitoring service. With 24/7 coverage, credit monitoring services detect threats and alert you to changes in your credit reports, including new accounts, inquiries, and suspicious activity. A 2022 Mystery Shopper survey found that Aura sends fraud notifications more reliably and faster than any other identity theft protection service³.
• Regularly check your financial accounts and statements. It’s good practice to review your bank accounts, credit card statements, and other financial records at least weekly to quickly identify unauthorized charges or withdrawals before they escalate. Small unrecognized charges could be a warning sign that someone is testing your stolen card details, so query anything unfamiliar.  
• Request your free credit reports and look for errors. Every American is entitled to free credit reports from all three bureaus every week from AnnualCreditReport.com. Review each report for unfamiliar new accounts and any suspicious activity or inaccuracies in your file.
• Don't give out personal or financial information. Never share sensitive details like your SSN, account numbers, or passwords in response to unsolicited calls, emails, or texts. Your bank will never ask for this information.
• Secure your accounts with strong passwords and 2FA. You should use unique, complex passwords for every account and enable two-factor authentication (2FA) whenever possible to create an additional layer of security against unauthorized access.

Aura is the perfect partner against identity theft and fraud. Along with credit freeze support and an instant Experian credit lock, Aura offers 24/7 monitoring for sensitive accounts, finances, and personal information. You’ll have access to the industry’s fastest fraud alerts if any of your information is compromised in data breaches or circulating on the Dark Web.

If you become a victim of fraud, Aura has your back with 24/7 access to a certified U.S.-based support team, plus up to $5 million in identity theft insurance coverage.