What is frozen credit - Credit freezes get mixed up a lot with fraud alerts, but they are actually not alike at all. Fraud alerts occur when new creditors find out that you may have been a victim of fraud and they are then required to take extra steps to verify that they should be charging your account or opening a new account for you. These fraud alerts also kep you from receiving prescreened offers for credit and insurance.

Credit freezes are put in place by you, the consumer. Whether or not you are able to put a freeze on your credit may depend on where you live. Most states will allow anyone to put a freeze on their own credit and others only allow you to freeze your credit if you have been a victim of identity theft.

Some of the basics of a credit freeze include:

1. If your credit is frozen your credit report can still be updated by your creditors. Just because you have frozen your credit does not mean you can make late payments without paying the price.
2. A credit freeze only prevents new creditors from accessing your credit report. If your existing creditors want to take a look and see how you are paying your other creditors they can do so.
3. A credit freeze is made at your individual credit bureaus.
4. Removing the freeze from your credit, or “thawing” a credit freeze takes several day to take effect once initiated.
5. A credit freeze does not prevent you from using your credit cards. Your cards are not frozen, only the ability for new lenders to look at your credit card is frozen.

These are the basics of frozen credit. A credit freeze can help reduce your chances of being an identity theft victim. But remember if your goal is to avoid prescreened credit card offers or have creditors alerted to fraudulent activity on your account you will want to look into a fraud alert service, not a credit freeze.