If you’ve worried about identity theft or unauthorized accounts being opened in your name, you’ve probably come across the idea of freezing your credit. As a CPA firm, we get questions about this from both individuals and business owners—especially with the rise of data breaches and digital fraud.
Whether you’re a consumer protecting your personal credit or a business owner concerned about fraudulent activity in your name, understanding when and how to freeze your credit can be a valuable tool.
What Is a Credit Freeze?
A credit freeze, also called a security freeze, is a free tool that restricts access to your credit report. When your credit is frozen, creditors can’t pull your credit file—which means new credit cards, loans, or lines of credit generally can’t be opened in your name unless you lift the freeze temporarily or permanently.
You’ll need to contact each of the three credit bureaus—Equifax, Experian, and TransUnion—to freeze (or unfreeze) your credit. Most allow you to do this online in just a few minutes.
The Pros of Freezing Your Credit
- Strong protection against identity theft: If someone steals your personal info, they won’t be able to open a new credit account in your name.
- It’s free: Federal law requires credit freezes to be free for consumers to place, lift, or remove.
- No impact on your credit score: A freeze doesn’t affect your current credit, payment history, or score.
- You can still use your existing credit: Freezing your credit won’t stop you from using your existing cards, paying your mortgage, or refinancing.
The Cons and Limitations
- You have to lift the freeze to apply for credit: If you’re shopping for a mortgage, car loan, or even a new cellphone plan, you’ll need to temporarily unfreeze your credit.
- Buy Now, Pay Later (BNPL) may not work: Some BNPL services (like Affirm or Klarna) check your credit before approving a purchase. If your credit is frozen, your transaction may be declined.
- You have to manage freezes at all three bureaus: There’s no one-stop solution—you’ll need to freeze and unfreeze with each bureau individually.
- Doesn’t protect against all fraud: A freeze only stops new credit accounts. It won’t prevent misuse of your existing accounts or other types of fraud like tax ID theft or medical identity theft.
When Should You Freeze Your Credit?
You should consider freezing your credit if:
- You’ve been a victim of identity theft or data breach
- You don’t plan on applying for new credit anytime soon
- You want extra peace of mind with minimal effort
You might hold off if:
- You’re actively shopping for a loan, credit card, or new utility service
- You frequently use BNPL services
- You’d find it inconvenient to manage the freeze/unfreeze process
How to Freeze (or Unfreeze) Your Credit
Visit each bureau’s website to create an account and place your freeze:
- Equifax: https://www.equifax.com/personal/credit-report-services/
- Experian: https://www.experian.com/freeze/center.html
- TransUnion: https://www.transunion.com/credit-freeze
Each will give you a PIN or password to manage your freeze going forward. You can lift it temporarily for a specific lender or timeframe, or remove it entirely.
A credit freeze is one of the simplest and most effective ways to protect against certain types of fraud. For business owners, it’s especially important to be aware of how your personal credit may still be used to open accounts tied to your business—so locking it down can provide an extra layer of protection. Just be mindful of how it may impact access to financing, vendor accounts, or services like BNPL that rely on soft credit checks.
Still unsure whether a credit freeze is the right move for you or your business? Reach out—we’re happy to walk you through the decision.
