What is a credit freeze (security freeze) and what is its purpose under the FACT Act?

• A. A credit freeze restricts access to a consumer’s credit file to prevent new accounts from being opened; it can be placed, temporarily lifted, or thawed with a PIN or password
• B. A credit freeze raises credit scores
• C. A credit freeze permanently removes all personal data from credit files
• D. A credit freeze allows new accounts but with higher fees

Answer: (C)

A security freeze limits who can access your credit file, making it harder for new creditors to open accounts in your name. Under the FACT Act, you place a freeze so lenders can’t view your report to approve new credit unless you lift the freeze (temporary thaw) using a PIN, password, or secure process. It’s a protective measure aimed at preventing identity theft and new-account fraud, not a way to change your credit score. It doesn’t delete information from your file, and it doesn’t permit new accounts with higher fees. It’s also different from a fraud alert, which signals potential misuse but doesn’t block access to your file in the same way a freeze does.