How I got a credit card while I had a credit freeze

Woman using the new credit card that she got even though she has a credit freeze.Image: Woman using the new credit card that she got even though she has a credit freeze.

In a Nutshell

When I wanted to get a credit card, I had to lift a credit freeze that I had put in place after a data breach. By following a few key steps, I was able to lift the freeze to allow potential creditors to access my report while keeping identity thieves from opening new accounts in my name.
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Last summer, as I prepared for a vacation to Europe, I realized I could save money by carrying a credit card with no foreign transaction fees. When traveling, I prefer to carry a small amount of currency along with a credit card. My current lineup of credit cards all charged foreign transaction fees, so I applied for a new one.

However, to get approved, I had to take an extra step: lift the credit freeze I had placed soon after my personal information had been disclosed in a data breach.

Here’s what I learned about credit freezes through this experience.

What is a credit freeze?

According to the Federal Trade Commission, or FTC, a credit freeze, also known as a security freeze, allows you to restrict access to your credit report. The FTC says this action may make it “more difficult for identity thieves to open new accounts in your name.”

Fees for a credit freeze may currently cost $5 to $10 depending on your state of residence. But if you’re a victim of identity theft, you may be eligible for free security freeze services. New federal legislation requires credit-reporting agencies to begin offering consumers free credit freezes no later than September 21, 2018.

Keep in mind that if you want to open a new line of credit, a credit freeze may prevent you from doing so unless you temporarily lift the freeze. Most creditors need to review your credit report prior to approving a new account. For example, a credit card company may pull a report before approving a card with a certain credit limit.

Similarly, a mortgage lender needs to see your file before approving a home loan. And others, such as a prospective landlord or employer, may review your credit report before signing an apartment lease or bringing you onboard as an employee, although some cities and states limit job-related credit checks.

When a potential creditor requests a look at your credit report for a new account, access is denied — unless you lift the freeze.

How did I get a credit card with a freeze?

A freeze can be removed completely, lifted for a specific period of time or lifted for a specific entity, such as a potential creditor, landlord or employer.

You can request its removal or a temporary lift by contacting the credit bureaus where you placed the freezes. Be sure to have the PINs you received after placing the freeze; you’ll need these unique codes to verify your identity. In my case, I received my PINs when I placed the freezes online. I printed and saved paper copies of the electronic confirmations for future reference.

When I discovered my card approval might be delayed or rejected because of the freeze, here’s what I did.

  • I called the credit card provider and explained my situation to customer service, who recommended I speak to a representative in underwriting.
  • I followed instructions from the underwriter to obtain the necessary one-time authentication code from the appropriate credit-reporting agency. (The underwriter told me which credit-reporting agency to call.)
  • I passed this code to the underwriter who makes credit decisions.
  • I received card approval while I was on the phone with the underwriter, a process which took about thirty minutes.

I opted for a one-time lift, though I could have removed the freeze altogether or made my credit report accessible for a limited period of time. In my experience, the release of information was fast (the underwriter accessed my credit information while we talked on the phone) and involved communication with just one credit-reporting agency.

But your experience may be very different. For example, you may need to contact all three major credit bureaus if your underwriter doesn’t reveal the agency it relies upon for credit reports.

It may also take up to three days for a credit lift to be processed and completed. In addition, the underwriting decision or credit approval process may take much longer.

I didn’t pay to lift my credit freeze, as this service is free to consumers in my state. You may be charged a fee, depending on your state’s regulations. To learn the specifics of fees in your state, contact your attorney general’s office or conduct a search using Experian’s state-by-state resource on security freezes.

Why might you freeze your credit?

If you’ve been a victim of a data breach like me, freezing your credit could help thwart the efforts of identity thieves.

Data breaches are incidents in which your confidential information stored with a third party, such as a merchant, health care organization or bank, becomes available to outside entities without your permission.

Criminals may hack into a retailer’s database and steal personal information — such as your name, address, birthday, email address, credit card numbers and Social Security number.

Using this information, someone may make a purchase, open a utility account, apply for credit cards or access medical services under your name. Creditors may then approach you for payment of goods and services consumed by the identity thief.

For example, a criminal may be able to open a store credit card in your name using your Social Security number and home address, and then purchase items with this card. Later, you – the victim – may receive the bill for items purchased by the thief.

David Blumberg, public relations director at credit reporting agency TransUnion, a Credit Karma partner, says, “A freeze is a drastic solution, but it can prevent a credit report from being released in response to a new credit application.”

Creditors unable to access your credit report may deny a new account request, possibly preventing someone else from opening an account in your name.

How long should you keep the freeze?

A freeze remains in effect until you remove or lift the freeze. How long you should consider keeping the freeze depends on your situation. Blumberg says, “We recommend keeping the freeze in place if someone is actually using your identification to attempt to open new credit accounts.”

How effective is a credit freeze?

There are limits to the effectiveness of a credit freeze in protecting your accounts from fraud or theft. According to the FTC website, this tool doesn’t prevent a thief from making charges to your existing accounts. You still need to monitor bank, credit card and other statements for fraudulent transactions. If you’re a Credit Karma member, you can get free credit monitoring of your TransUnion and Equifax credit reports, meaning we’ll alert you after significant changes are made.

Bottom line

A credit freeze is one tool that could be useful if your data has been breached or you’ve been a victim of identity theft. Contact all three major credit-reporting agencies to place a freeze.

You can lift the freeze and allow potential creditors to access your report at your discretion while keeping identity thieves from opening new accounts in your name.