Definition
A credit freeze, also known as a credit report freeze, credit lock, or security freeze, allows an individual to stop a credit bureau from selling his or her credit report data.
Analysis
Credit freezes were initially made possible by states passing laws ordering credit bureaus to allow customers to impose a freeze. In 2007, TransUnion, Equifax, and Experian all announced that they would let consumers in all states place a freeze on their credit files.
The credit freeze is used as a tool for fighting and preventing identity theft. Fraudulent accounts cannot be opened because potential lenders are unable to access the credit files, and are thus unwilling to grant creditor. If an individual has ordered a credit freeze and wishes to open a new credit account, he or she must first unfreeze the credit file.
