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6 FAQs About Credit Freezes When Buying a Home

In the age of information and accessibility, it can be difficult to keep your personal, private info safe and out of reach. Credit freezes allow the safeguarding of your information but can also make it difficult when applying for a home loan.
In the age of information and accessibility, it can be difficult to keep your personal, private info safe and out of reach. Credit freezes allow the safeguarding of your information but can also make it difficult when applying for a home loan.

Credit card holders often request a freeze on their credit if they believe their identity to be compromised. Scammers can get a hold of your personal information and run up charges or take out a car loan or a mortgage with just a few vital pieces of info.

Freezing your credit places a block on your credit report — meaning, no one will be able to pull your credit report to open new lines of credit, including loans. You are still able to use your credit cards as usual. If you’ve recently frozen your credit, this can affect a potential home purchase.

Here are six frequently asked questions about credit freezing and the home buying process.

Can I get a loan with a credit freeze?

In short, no. Any and all lenders will need to pull your credit report before even considering you as a potential borrower. While your credit is frozen, lenders can’t access your credit report. Your application, bank statements, and relationship with the bank has a solid pull on your ability to get a mortgage, but the lender really needs to see your credit history and credit score.

Your credit report communicates the most vital information about your financial history and trustworthiness to pay back borrowed money. Without access to your credit report, lenders have no idea if you are a safe bet.

How do I thaw my credit freeze?

If you’re looking to get approval for a home loan and your credit is frozen, you will definitely need to unfreeze it. Unfreezing your credit is as simple as freezing it. Stick it in the microwave on defrost for 10 minutes — only kidding.

When you placed the freeze with TransUnion, Equifax, and Experian, each bureau provided you with a PIN. When you go to unfreeze it to apply for a mortgage, each company will require that PIN again to unfreeze it.

How long does it take to lift a credit freeze?

According to the Financial Trade Commission, thawing your credit can take as little as a few seconds to as many as three days. If you’re attempting to get approval for multiple lines of credit or getting multiple loan options from varying lenders, then you may be required to wait longer periods of time with each freeze and thaw request.

In a majority of states, credit freezes remain until the credit holder requests its removal. If you know you’re going to be applying for home loans, unfreeze your credit for the duration of the home purchasing process to ensure an expedited transaction.

Does it cost money to remove a credit freeze?

After the Equifax data breach in 2017, consumers can now request a credit freeze and year-long fraud monitoring for free. Fortunately, to freeze and unfreeze your credit periodically as you attempt to secure a mortgage payment also doesn’t cost money.

Do I need to freeze my credit?

If your identity or information hasn’t been compromised, but you don’t plan on applying for a home, car, or personal loan anytime soon, then it might be a good idea.

A credit freeze still allows you to use your credit cards, but it puts a block on lenders, credit card issuing companies, and other financial institutions from pulling your credit report. If someone does gain access to your information and attempts to open lines of credit in your name, there’s an extremely low chance they will be able to if your credit is frozen.

What is the difference between a credit lock and a credit freeze?

These terms are often used interchangeable, however, they don’t offer similar protection. A credit lock also prevents creditors from pulling your report but it’s much simpler to unlock. You can request access via mobile app, email, or phone and your credit report is unlocked immediately.

Some credit card companies even market their credit locking services and charge a monthly fee for use of this feature. While a credit freeze is free and can take longer to remove, a credit lock can be implemented with the push of a button.

No matter your current financial situation, an experienced realtor will be able to guide you through the loan application process. Buying a home is an exciting and complicated investment. Trust a Clever Partner Agent to have your best intentions at heart and help you secure the home of your dreams.

In select states, local Clever Partner Agents even offer a Home Buyer Rebate of $1,000 that puts money back in the new homeowner’s pocket. Contact Clever today to speak with a knowledgeable Partner Agent.

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Reuven Shechter

Reuven Shechter is the Outreach Coordinator at Clever Real Estate, the free online service that connects you with top real estate agents to help save on commission. He spreads the word about Clever, disseminating studies to journalists and developing relationships with media outlets. Reuven is passionate about investing in real estate and creating lasting success for families. His writing has been featured in Max Real Estate Exposure, Leverage Marketing, and more.

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