What Is Credit Freeze

• A credit freeze blocks new lenders from viewing your report, stopping unauthorised access. 

• Use a freeze if you’re not applying for credit or after a data breach. 

• To freeze, provide ID, address proof and date of birth; tax documents may be requested. 

• You must lift the freeze to apply for new credit; this can add delay or incur fees. 

• Current lenders, marketers, employers and government agencies may still access your frozen report. 

A credit freeze is a security measure that restricts access to your credit report, preventing unauthorized access and new credit accounts from being opened in your name. When you place a freeze, credit bureaus will not release your report to potential creditors without your consent. This makes it difficult for fraudsters to open fraudulent accounts even if they have your personal information, thus helping prevent identity theft. You can temporarily unfreeze your credit report when you need to apply for new credit and then freeze it again afterward. It is important to understand the benefits and implications of a credit freeze before opting for it. 

To freeze your credit in India, you will need to provide personal identification details like your PAN number and Aadhaar number, along with other information such as your registered mobile number and date of birth. 

Personal Information Required to Freeze Your Credit

• PAN Details: Your Permanent Account Number is a key identifier for financial transactions in India.
• Aadhaar Number: This is another essential piece of identification used for verification.
• Registered Mobile Number: This is often used for OTP verification to confirm your identity.
• Date of Birth: This is a standard piece of personal information used for identity verification. 

Ensure these details are accurate to help prevent delays in processing your request. You will also need to go through an identity verification process, often using an OTP, and you should receive a PIN or password to manage the freeze later. 

Documents Required to Freeze Your Credit

You also may be asked to submit certain documents. These can include: 

• Identification Proof: Provide identification like Aadhaar card, PAN card, Voter ID, or Passport.
• Address Proof: Any address proof like the abovementioned documents, or utility bills, bank statements, etc. that have your current address on them. 

You may also be asked to provide your tax statements and other documents. Be sure to keep these handy for a seamless process.

A credit freeze works by locking your credit report, preventing lenders and other third parties from accessing it to open new accounts in your name. To implement a freeze, you must contact each major credit bureau (TransUnion CIBIL, Experian, Equifax, & CRIF High Mark) individually to request the freeze. You will be given a unique PIN or password, which you'll need to provide to temporarily lift or remove the freeze if you need to apply for credit. 

• Access Restrictions: When a credit freeze is in place, credit bureaus are legally prohibited from sharing your credit information with potential creditors.
• Protection from Identity Theft: This prevents fraudsters from opening new credit cards, loans, or other accounts in your name, as lenders cannot access your credit report to approve such requests.
• No Impact on Credit Score: A credit freeze does not affect your credit score or your ability to use existing credit cards and accounts.
• Access for Existing Services: Existing lenders, creditors, and some government agencies can still access your report, as they are typically exempt from the freeze.
• Temporary Removal: To apply for new credit, you must temporarily ‘unfreeze’ your credit by using the PIN or password you received when you set up the freeze. 

To freeze or unfreeze your credit, you have to contact each of the major credit bureaus and follow their respective process. While the process may vary slightly among each Credit Information Provider (CIC), here are the basic steps involved: 

How to Freeze Your Credit

• Contact Each Credit Bureau: Visit the official website for each of the three credit bureaus or contact them by phone/mail. 
• Verify your Identity: Provide your personal information, such as your name, address, date of birth, and PAN, to confirm your identity. 
• Request the Freeze: Follow the instructions to place a security freeze on your credit report. This will block new credit from being opened in your name. 
• Save your PIN: You will be assigned a unique PIN or password that you will need to unfreeze your credit later. 

Note: The exact process and facility may vary from one bureau to another Contact each bureau to freeze your credit report with them and follow the steps as directed to restrict access to your credit report. 

How to Unfreeze Your Credit

• Contact Each Credit Bureau: Reach out to the credit bureaus online, by phone, or by mail.
• Provide your PIN and Information: You will need to provide the unique PIN you received when you placed the freeze, along with other personal information to verify your identity.
• Request an Unfreeze: Specify if you need to unfreeze your credit temporarily (for a specific period) or permanently.
• Access Credit Options: The bureau will lift the freeze, allowing new credit applications to be processed.

A credit freeze does not directly impact your credit score because it only restricts access to your credit report, not the information on it. Your score will continue to be affected by factors like payment history and credit utilisation, etc. 

• No Direct Impact: Placing a credit freeze does not lower or hurt your credit score.
• Based on Other Factors: Your score will continue to change based on your normal financial activity, such as paying bills on time or carrying a balance.
• Existing Accounts Unaffected: Your credit cards and loans are not affected, and you can continue to manage them as usual.
• Preventing New Accounts: The main purpose of a credit freeze is to stop identity thieves from opening new accounts in your name.
• Potential for Delays: If you forget to unfreeze your credit report when applying for a new loan or credit card, your application may be delayed or rejected since the lender cannot access your report. 

Consider freezing your credit when you’re not actively applying for new credit, such as a credit card or loan. This is especially useful if you’re taking a break from credit-related activities, want to protect against identity theft, or have been affected by a data breach. A credit freeze can offer peace of mind during these times by blocking unauthorised access to your credit profile. 

Placing a credit freeze is a powerful way to prevent fraudsters from opening new accounts in your name, without impacting your credit score. Here are its key benefits: 

Prevents Identity Theft

Freezing your credit is an effective method to prevent fraudsters from opening new credit accounts in your name. Without you unfreezing it, no one can open new credit lines because the bureaus will not perform a hard inquiry. 

No Negative Impact on Credit Score

A credit freeze does not affect your credit score, as it is a security measure, not a reflection of your creditworthiness.

Easy to Access and Control

You can temporarily lift the freeze whenever you need to apply for credit, like a mortgage or a credit card. This means you can unfreeze your credit for a specific period and then refreeze it afterwards to maintain protection.

Limited Cost

In most cases, freezing and unfreezing your credit is a free service, as most credit bureaus offer it for free. Limited charges may be involved when requesting to unfreeze your report. 

While freezing your credit provides strong protection, there are some things you should be cautious of: 

Inconvenience

You’ll need to temporarily lift the freeze anytime you apply for new credit, which can add time to the process

Limited Protection

A freeze only protects against account fraud from happening in the future. It cannot help in case of existing fraud.

Fees and Charges

Most credit bureaus offer this service for free. However, some nominal charges for lifting and re-freezing credit may be applicable, depending on the bureau’s policies.

Accessibility

If you forget your PIN or password used for the freeze, it can get complicated to regain access.

Even with a credit freeze, certain parties can still access your credit report. They are mentioned below: 

• Yourself: You can access your own credit report to review your information or lift the freeze when needed. 

• Current Creditors: Lenders with whom you already have accounts can continue to check your report. 

• Marketers: Pre-approved credit offers may still be available, as marketers can access your data. 

• Government: Depending on the circumstances, the government may be able to check your credit reports even during a credit freeze. 

• New Employer: When opting for a new job, you can allow your potential employer to check your credit profile if required.