The Credit Freeze Loophole Nobody Knows About (and It Costs You $0)

Identity theft can happen to anyone. Scammers don’t discriminate, but did you know freezing your credit can help protect your assets?

Unfortunately, this type of crime is on the rise. In 2025, a total of 31,675 official identity theft complaints were recorded by the FBI — a 47% increase since 2024. Personal data breaches are also a major issue with 67,456 reported in 2025. 

Maybe you’ve already had personal data stolen or perhaps you want to proactively fight against it. Either way, keep reading to learn more about the credit freezing loophole nobody talks about.

How a Credit Freeze Works

When your credit is frozen, no new accounts can be opened in your name, according to the Federal Trade Commission (FTC). It can stay in place as long as you wish and it’s completely free.  

During this time your credit will essentially be on lockdown. Even you won’t be able to perform activities like applying for new credit, allowing a potential employer to run a credit background check or authorizing a landlord to run a credit check for a new apartment. However, you can temporarily lift the freeze for these actions.

If you decide to freeze your credit, you’ll need to contact each of the three credit reporting agencies — Equifax, Experian and TransUnion — individually, according to USAGov. Requests can be submitted online, by phone or through the mail, but have different response times.

Freeze requests submitted online or by phone must be honored within one business day. Those sent through the mail must be completed within three business days. When you’re ready to unfreeze your credit, online and phone requests are lifted within an hour, while mail submissions are completed within three business days.

Here’s When a Credit Freeze Is Even More Important

Anyone can freeze their credit at any time. However, taking this step is especially pertinent if you’re the victim of identity theft or your personal information — especially your Social Security Number — was exposed in a data breach, according to Experian.

Do note, a credit freeze isn’t the only action you can take. A fraud alert could be sufficient in some cases, according to Experian. 

A fraud alert lets potential lenders know someone else might try to apply for credit in your name, without denying them access to it. If an alert is on your account, it will prompt lenders to verify your identity before giving you a new line of credit (“Why should I freeze my Experian credit report?”).

This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.