With ever-rising cases of identity theft and financial fraud in the country, freezing one’s credit report is one of the simplest ways to protect one’s personal information and repayment integrity. This write-up is dedicated towards understanding this concept, what a credit freeze and when it should be considered.
What is a credit freeze?
A credit freeze, or a security freeze, is nothing but a way to restrict access to one’s credit report. When such a freeze is active, lending institutions cannot view your credit report. This also prevents or stops anyone from opening new accounts in your name. Keep in mind that a credit freeze will never erase your credit history or lower your credit score.
Furthermore, it does not impact one’s credit score, repayment activity or use of existing or ongoing credit cards and personal loans. You can still check your credit score at any time.
How to freeze your credit
Freezing your credit is straightforward. You can submit a request online, by phone, or in writing to the credit bureau that maintains your report. Once processed, your report is locked until you choose to lift or ‘thaw’ the freeze. If you later apply for new credit, you must temporarily or permanently unfreeze your report.
Basic information you will need to freeze your credit
To place a freeze, keep these details ready:
- Full name and date of birth, i.e., original documents such as Aadhaar and PAN, to verify this.
- Current and previous addresses, as well as utility bills, can be used to support this.
- Basic identification details and a valid proof of identity document, such as a government-issued ID or utility bill.
These documents and details will help verify your identity and prevent unauthorised changes.
What a credit freeze really does
Do keep in mind that a credit freeze never closes or blocks your existing accounts. It only stops new lending institutions from accessing your credit report. You can think of it as a security cover or a security lock. You can turn it on for complete protection and unlock it while applying for a new credit line or a loan.
When should you freeze your credit?
Consider freezing your credit if:
- When you suspect identity theft or misuse of your personal data.
- When you notice unfamiliar loan inquiries, hard checks or notices.
- You want extra security and are not planning to apply for new credit in the near future.
Remember to lift the freeze before applying for any new personal loan or credit card to avoid potential delays.
In conclusion, a credit freeze is a powerful, convenient way to safeguard your financial identity without affecting your credit score. Use it wisely for added peace of mind and long-term financial prosperity.
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Disclaimer: Mint has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards, and credit scores. Mint does not promote or encourage taking credit, as it comes with risks such as high interest rates and hidden charges. We advise investors to discuss with certified experts before taking any credit.
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