You’ve probably heard the term credit freeze, but many people aren’t sure what it really means or when it makes sense to use one. A credit freeze, also known as a security freeze, limits access to your credit report so lenders can’t open new lines of credit in your name without your approval.

That leads to the bigger question: when is it appropriate to put a credit freeze in place?

After Identity Theft or Fraud

If your Social Security number, bank account, or other personal data has been stolen, a credit freeze can help prevent criminals from opening credit cards and loans in your name.

This is especially important for older adults, who are often targeted by scammers.

If you’re helping an aging parent manage their finances, putting a freeze on their credit can add an extra safeguard against fraudulent activity and protect their retirement savings.

During a Data Breach

Large-scale data breaches have become far too common, exposing individuals to fraud and identity theft. If a company where you have an account notifies you that your personal information may have been compromised, consider a proactive credit freeze.

You may not be able to control what the hackers do with the stolen information, but you can make it more difficult for them to scam you.

Achieving Financial Stability

If you don’t plan to open new credit cards, loans, or mortgages in the near future, you may consider a credit freeze. If you’re financially stable and not actively shopping for credit, freezing your file adds a strong layer of protection with little day-to-day impact.

For Extra Peace of Mind

Some people simply sleep better knowing their credit is locked down. If you’re concerned about elder fraud for an aging parent, or if you’re trying to safeguard your own finances, a credit freeze can assure you that no one is opening accounts without your permission.

Before a Life Transition

Major life transitions, like sending a child off to college, entering retirement, or going through a divorce, can leave you financially vulnerable.

For seniors, retirement can bring new routines, health care needs, and financial adjustments that make it easier for fraud to slip through the cracks.

Placing a credit freeze during this period can help ensure their focus remains on enjoying retirement, rather than dealing with identity theft.

Protecting Yourself and Your Loved Ones

A credit freeze is a proactive step towards protecting your financial health. The best time to consider it is when your risk of identity theft is higher, or when you want the peace of mind that comes with tighter control over your credit report.

If you’re not sure whether a credit freeze is the right step for you, a daily money manager can help you weigh the pros and cons, monitor your accounts, and keep your finances (or your loved one’s finances) on track. Reach out to Everyday Money Management today to schedule a consultation and take the first step toward protecting what matters most.

When Should You Do A Credit Freeze?