Should I Keep My Credit Report Frozen? An Updated Look At Pros/Cons

Update 09/20/18: When I originally posted this article I stated that you do still receive pre-screened offers. This was based on information found on the FTC website. Readers rightfully pointed out that you do receive some offers but not as many as you’d receive when your reports are unfrozen. Sites like CardMatch also won’t show any offers, because of that I’ve added it to the cons. I’ve also added having to unfreeze reports for bank account openings as a con as well. I believe it’s important to outline when you make mistakes so that’s why this post has been reposted.

Starting on Friday consumers will be able to freeze and unfreeze their credit reports for free. Several readers have asked if they should keep their reports frozen or not. Before we get started it’s important to understand what freezing your credit report actually does.

When you freeze your report it prevents it from being accessed by anybody, the only exceptions are that you can still access your own report and creditors that you already have an existing relationship with can still access your report but they can’t extend you new lines of credit. Having your report frozen can be useful for a number of reasons (discussed below), but the main reason people want to freeze their report is to prevent identity thieves from opening accounts in their name. If your report is frozen then a lender cannot access it and because of that no credit will be extended. When you place a freeze on your report you’re also given a PIN or password and this needs to be used whenever you want to:

  • Unfreeze your report
  • Allow a specific third party to access your report (e.g a lender)

Now that you understand what a credit freeze is let’s talk a look at both the pros and cons of keeping your reports frozen.

Pros

  • Security. As mentioned previously the main reason people want to freeze their report is to prevent identity thieves from opening new accounts and causing havoc. Having a freeze in place makes this significantly more difficult as they need to know your PIN/password to be able to lift that freeze.
  • Spreading credit inquiries over all three consumer reporting agencies. There are three main consumer reporting agencies: Equifax, Experian & TransUnion. One reason credit card companies will deny you is for too many recent inquiries for credit. An inquiry for credit (also known as a hard pull) is done whenever you apply for a loan/credit card, but in most cases they will only do a hard pull on your credit report from one of these three consumer reporting agencies. What reporting agencies a lender will pull from largely depends on what state you live and the lender themselves. It’s not uncommon for most lenders in one state to all pull from the same consumer reporting agency. In cases like that it’s useful to be able to ‘spread’ your inquiries over the other two unused agencies. This is possible with some lenders as they will pull your credit report from a different reporting agency if one is frozen. For more details read this post. This isn’t that applicable in this case as it normally requires one to be unfrozen, but sometimes they will accept the PIN/password instead. Keep in mind things like the Chase 5/24 rule care about how many new cards you have opened, rather than how many inquiries you have and new cards show up on all three reports.

Cons

  • You will need to unfreeze your report every time you apply for credit. If you want to apply for any loan, you’ll either need to unfreeze your report or provide an access code so the lender can view the report. Keep in mind under the new law the consumer reporting agencies have to unfreeze it within one hour and freeze it within one day.
  • Pre-screened offersAccording to the FTC you can continue to receive pre-screen offers even with a frozen report. In practice most people report not receiving pre-screened offers or not receiving as many as they previously did. Keep in mind sometimes pre-approved offers are higher than publicly available (e.g Platinum 100,000) or bypass rules (e.g Chase in branch or selected for you offers) so having access to these is important. In particular CardMatch won’t show any pre-approved offers if your reports are frozen.
  • Bank account bonuses/openings. When you open a new bank account (for the sign up bonus or other purposes) they do a soft pull on your credit report. If your report is frozen then they will usually just deny you. For those chasing bank account bonuses this means you’ll need to unfreeze your report each time you do.

F.A.Q’s

Can I still receive FICO/credit score updates?

According to this page on Credit Karma you can’t enroll for Credit Karma when your report is frozen, but you will continue to receive updates. This makes sense as existing relationships are allowed continued access as long as no credit is being extended. This should also be the case for other free credit monitoring/scoring sites and for free FICO scores provided by lenders.

Does freezing your credit report affect your score?

No it does not.

Final Thoughts

I think it’s really an individual choice on what the best option is. Having your identity stolen and accounts opened in your name sounds like an absolute nightmare. I don’t mind having to freeze and unfreeze my reports, but not having access to pre-screened offers is a big deal. I think I’ll end up keeping mine unfrozen for now, but it might depend on how difficult it is to freeze and unfreeze.

I’m also almost certain I’ve missed some pros and some cons, feel free to share your own thoughts in the comments below.

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Gadget

@guest_768686 DoC covered that in the article. You usually don’t know. For CC apps, the region you live in also plays a part in which bureau gets pulled. You can call and ask, but I would say often you are going to get the wrong answer. CSR’s don’t know the inner technical details of how the system they use works – they punch in the info and it spits out the answer.

Bank account applications often soft pull your credit:

1. Sometimes to do the application knowledge-based questions.
2. Sometimes to see if they want to offer you additional products, like credit cards.
3. Possibly to gauge your overall financial health.

Unless you have some specific reason to have your reports locked/frozen, I don’t recommend it if your going to be opening a lot of checking accounts for bonuses. If you get denied for an account, you will always be second-guessing whether or not a frozen report caused you to be denied. The error message you get can be cryptic, if you get any details at all. And you can call after the application… and see what they say. It may or may not be good info.

DoC could start an article on who does/doesn’t soft pull, but the problem with that is most people won’t know for certain. Most people only get access to that info once a year (soft-pull info not available in Credit Karma, for example), and even when they do have the full credit report, it’s may have been months and maybe the soft pull didn’t occur as part of the application and just done by the marketing dept.

AlarmingConsequence
AlarmingConsequence

Thanks for confirming my thinking on this.This is actually exactly my thought process, particularly a) CSR not knowing and b) the second-guessing around cause of denials.

It is great that DoC includings hard or soft pull data, it would be more precise if it reported which of the three bureaus were queried (TransUnion/Experian/Equifax).

Thanks!

Eric M.
Eric M.

“creditors that you already have an existing relationship with can still access your report but they can’t extend you new lines of credit”

This is a weird DP and definitely doesn’t seem like it should be possible, but I’ve actually had 2 AMEX cards (SPG Preferred and BCE) approved with all 3 of my credit reports frozen.

Chris
Chris

Insurance rates are very inquiry sensitive. If you keep clean the bureau(s) your insurer pulls, you stand to save a lot.

Closertothesun
Closertothesun

“Can I still receive FICO/credit score updates?

According to this page on Credit Karma you can’t enroll for Credit Karma when your report is frozen, but you will continue to receive updates. ”

Kinda misleading here, since CK doesn’t give FICO, and the Vantage score they give you isn’t used by 95% of lenders.

JK
JK

I get pre-approved offers in the mail pretty much every day, even though I always opt out / set my preferences for electronic only and no third party sharing. I hate it! It’s so annoying, and it’s bad for the environment. I’ll freeze my credit reports in a heartbeat if it means I can cut down on the junk mail.

Sammy
Sammy

This might fit your needs: https://www.optoutprescreen.com/

P
P

I do freezing now because of Citi 9-digit mailers. Citi always pull both Equifax and Experian. They’ll approve me if only Experian is frozen but not with Equifax frozen. I like doing this since the total number of inquiries on my Experian report are equal to the combined number of inquiries on my Equifax and Transunion.

Gadget

These are the kind of DP’s we will see a lot more of… which is great! But once again, is that universal, or state by state, or product to product, unsolicited or preapproved.

JL
JL

if only there was an app for that…where you can toggle frozen/unfrozen.

Yoni
Yoni

The Experian CreditWorks premium you press and hold a button on screen with the app to lock and unlock.

It’s instantaneous – when we bought a new Car in July – had to unlock so they could pull credit – re-tried to pull credit right after I unlocked (unlock/unfreeze -semantics mostly but functionally same) and was able to pull credit with 15-30 seconds of unlocking – same with BofA on a Recon call.

anthony
anthony

How much does that service cost?

Joel
Joel

Transunion has now a free app! Check it out

Kay
Kay

Thanks Will for writing this post. Gives us all some food for thought as to what we should do. I appreciate your thoughts and the thoughts of everyone who have posted. I am along line of freezing all of mine but I will continue to read everyone’s comment before I turn on the switch. Thanks again Will!

Abey

Thanks for the post. Very useful.

Small typo. take for talk.
(let’s talk a look at both the pros and cons).

Jason_08
Jason_08

William Charles

“Sould I Keep […]”

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