What Is Credit Freeze? What Are the Advantages of Credit Freeze?

Approximately seven percent of Canadians fall victim to identity theft each year, and these numbers are on the rise. However, this shouldn’t worry you so much since consumers all over Canada have access to one powerful tool- the security freeze- that will help you lock down your credit report, preventing criminals from establishing new lines of credit in your names. So, what is a credit freeze and what are some of its advantages? Read on to find out.

What Is Credit Freeze?

A credit security freeze which is commonly referred to as a credit freeze occurs when you direct one of the two credit bureaus in Canada ( Equifax Canada or Transunion Canada) to avoid releasing your credit history report to any third party that may request for it without your consent. This means that both financial and non-financial companies are locked out from assessing your credit history and offering loans, credit, and other services to someone else who is using your identity. Technically, you prevent fraudulent new credit accounts from being opened and operated with your identity.

Keep in mind that credit freeze doesn’t have any effect on your credit worthiness and score, and you can still apply for no credit check loan Canada even when your credit is frozen. However, the Federal government and the already existing creditors can still access and review your credit report. You can also access your credit report personally.

What Are the Pros of a Credit Freeze?

The two most significant advantages of credit freeze are:

Credit security freeze is a proactive measure of preventing new credit account fraud. Typically, a credit freeze goes a step further than the usual consumer credit report protection techniques such as credit monitoring. A credit freeze is the only method that completely thwarts new credit account identity fraud.

A credit security freeze put you in strong control of your financial report. It offers you a chance to lock out new credit applications in your name that may ruin your credit report. It puts you in control and ensures that nobody compromises your personal information. You feel a sense of empowerment, control, and most important, peace of the mind.

You may be wondering what you will do if you want to apply for a loan personally or you find yourself in other situations that require your credit report, and you have a credit freeze in place. Well, when you apply for a credit freeze, the credit bureau provides you with a PIN which you can use to lift the freeze.