Why a credit freeze isn’t the end of identity theft

Most U.S. data breach disclosures explain what information was leaked and any protective steps available to consumers.

At the federal level, the Federal Trade Commission advises that after a breach involving sensitive personal information, consumers may consider placing a credit freeze to help prevent new credit accounts from being opened in their name.

Many people place that credit freeze and assume they’re protected. But a credit freeze is not a comprehensive block against identity theft. It stops most new credit applications, but it doesn’t prevent the misuse of your Social Security number or account takeovers.

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What a credit freeze actually does

A credit freeze, also called a security freeze, limits access to your credit report at Equifax, Experian, and TransUnion. Under federal law, placing a freeze is free. When a freeze is in place, most lenders can’t access your credit file to evaluate applications for new credit cards or lines of credit. If a creditor can’t see your credit report, the application will usually be denied.

You can manage your credit freeze with each bureau individually. With Experian, for example, you sign in to your free online account at Experian’s credit freeze page and then place, lift, or schedule a thaw; you can also call Experian’s toll-free number (888-397-3742). If you plan to apply for credit, you must lift the freeze beforehand.

A credit freeze blocks most new accounts that require a credit check. It does not extend beyond your credit file.

Some identity protection services offer a credit lock feature that allows you to restrict access to your credit file through a mobile app. Like a freeze, it can limit new credit checks. The main difference is convenience, as you can typically turn it on or off quickly without logging into a bureau’s website or calling by phone.

Credit freezes can’t stop every form of identity theft

A credit freeze blocks new credit accounts, but it does not stop many common forms of identity theft that do not require a credit check.

Account takeovers: If someone has access to an existing credit card or bank account, they don’t need to open a new line of credit. They can change the email address, phone number, or mailing address tied to the account and begin making charges.
Tax identity theft: A fraudulent federal tax return does not need a credit check. If someone files a return using your SSN before you do, the IRS may reject your legitimate filing.
Employment fraud: If your SSN is used for employment, it will not appear as a credit inquiry. Instead, the earnings may be recorded under your Social Security record.
Government benefits fraud: Unemployment insurance and other state-administered benefits do not require a traditional credit check.
Medical identity theft: A stolen identity can be used to get medical treatment. Bills may not appear until the provider sends the account to collections.

What happens when the fraud doesn’t involve a credit inquiry?

When identity theft happens outside the credit approval process, there is no automatic reversal. Each category of fraud is handled by a different agency or company.

If a fraudulent tax return is filed, you must work directly with the IRS and submit Form 14039, Identity Theft Affidavit. The IRS may require identity verification before releasing a refund.
If your SSN is used for employment, you must contact the Social Security Administration to correct your earnings record.
If government benefits are fraudulently claimed in your name, the state agency is involved. There is no federal clearinghouse.
If medical debt appears in collections, you must dispute it with both the provider and the collection agency, often in writing.

There is no single agency coordinating these corrections. You’re responsible for identifying the fraud, filing the appropriate reports, and tracking responses across agencies.

If a freeze isn’t the end, what is?

A credit freeze addresses risks tied to new credit applications. Identity theft often goes beyond that. Comprehensive identity protection typically includes credit monitoring across all three major bureaus, alerts for new inquiries or accounts, and monitoring for exposed personal information such as Social Security numbers, driver’s license numbers, passport details, email addresses, and passwords.

Some services also monitor public records, address changes, identity verification activity, and even suspicious financial transactions when accounts are linked. Early alerts can help you spot fraud before it spreads.

If identity theft does occur, recovery can be complicated. Some identity protection plans provide access to fraud resolution specialists who help contact creditors, place fraud alerts, dispute unauthorized accounts, and prepare required documentation. Many also include identity theft insurance to help cover eligible recovery expenses, such as lost wages or legal fees.

No service can prevent every form of identity theft. But layered monitoring, fast alerts, and guided recovery support can make the damage easier to contain and resolve.

See my tips and best picks on Best Identity Theft Protection at Cyberguy.com.

Kurt’s key takeaways

A credit freeze is a smart move after a data breach, but it is only one layer of protection. Many forms of identity theft do not involve a credit check, which means they can happen quietly and take time to fix. Real protection comes from understanding the gaps, monitoring your accounts, and acting quickly if something looks wrong. The more proactive you are, the easier recovery becomes.

Have you placed a credit freeze, and did you know it does not protect against every type of identity theft? Let us know your thoughts by writing to us at Cyberguy.com.

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