How Freezing Your Credit May Affect Your Credit Score

Worried a credit freeze will tank your score? While it seems like such a drastic step would have consequences, placing a freeze on your credit report does not directly affect it.

1. Application Denials: With a freeze in place, lenders cannot access your credit report. This means any application you submit for a new loan or credit card will be automatically denied.
2. Hard Inquiry Impact: Even though the application is denied, it can still result in a hard inquiry on your credit file. A hard inquiry can cause a small, temporary dip in your credit score.
3. Stagnant Credit Limits: Lenders often perform soft inquiries to grant automatic credit limit increases. A freeze blocks this, which could lead to a higher credit utilization ratio if your balances increase, negatively affecting your score.
4. Hindered Credit Growth: A freeze prevents you from opening new accounts. This can limit your ability to improve your credit mix or build a broader positive payment history, potentially slowing your score's improvement over time.

How Much Will Freezing Your Credit Affect Your Credit Score?

While a credit freeze is a powerful security tool, it's wise to understand its potential effects on your credit. Here are a few key points to consider:

• Direct Score Impact. A credit freeze does not directly impact your credit score. Your score won't go up or down simply because you've initiated or lifted a freeze on your credit report.
• New Credit Applications. You must temporarily lift the freeze to apply for new credit. This allows lenders to perform a hard inquiry, which can slightly lower your score for a short period.
• Preventing Fraudulent Accounts. By blocking new accounts, a freeze can indirectly protect your score. It prevents fraudsters from opening lines of credit in your name, which would negatively affect your credit history.

How You Can Avoid Freezing Your Credit Affecting Your Credit Score

Plan Ahead for New Credit

A credit freeze primarily blocks new credit inquiries. If you anticipate applying for a loan, mortgage, or new card, you must temporarily lift the freeze. This allows potential lenders to review your history, ensuring your application process proceeds smoothly without any unnecessary complications or denials.

Maintain On-Time Payments

Your payment history is the most significant factor influencing your credit score. A freeze does not prevent existing creditors from reporting your payments. Continuing to pay all your bills on time is the most critical step you can take to maintain a healthy credit score.

Regularly Review Your Credit Reports

Even with a freeze in place, it's wise to monitor your credit reports for errors. You are still entitled to free reports from the major bureaus. Checking for and disputing inaccuracies ensures that your credit profile remains correct and isn't being negatively affected by mistakes.

Choose the Right Card to Freezing Your Credit

Your credit score plays a crucial role in your financial life, but a low number isn't a permanent setback. With consistent effort, it is entirely possible to improve your creditworthiness and build a healthier financial profile.

• Establish automatic bill payments. Payment history is the single biggest factor in your score, so setting up automatic payments is the easiest way to ensure you never miss a due date.
• Reduce your credit utilization ratio. Aim to keep your balance below 30% of your total credit limit, as high utilization can signal financial distress to lenders.
• Monitor your credit reports. Regularly check your reports from all three major bureaus—Experian, TransUnion, and Equifax—to identify and dispute any inaccuracies or signs of fraud.
• Become an authorized user. You can benefit from the primary cardholder's good credit habits by being added to their account, so long as they have a strong payment history.
• Limit hard inquiries. Applying for too much new credit at once can temporarily lower your score, so try to space out your applications.

The Bottom Line

Placing a freeze on your credit report is a security measure that will not affect your credit score. It simply restricts access to your file for most new credit applications.

Frequently Asked Questions

Does freezing my credit lower my credit score?

No, freezing your credit does not directly impact your credit score. It is a preventative measure that restricts access but doesn't alter the data used for score calculations.

Can I still check my own credit score if my credit is frozen?

Yes, you can always access your own credit reports and scores, even with a freeze in place. The freeze only blocks potential new creditors from viewing your file.

Will a credit freeze stop my score from changing?

No, your credit score can still fluctuate while frozen. Ongoing factors like your payment history, credit utilization, and the age of your accounts will continue to influence it.