What is a "credit freeze" in the context of the FCRA?

A "credit freeze" refers to a request made by a consumer to restrict access to their credit report, effectively preventing creditors from viewing it. This is especially important in the context of preventing identity theft, as it makes it much harder for fraudsters to open new accounts in the consumer's name. By initiating a credit freeze, the consumer ensures that their credit file cannot be accessed by lenders or others, which in turn stops any new credit accounts from being opened without their consent.

This mechanism is built into the Fair Credit Reporting Act (FCRA) to empower consumers to take control over their personal credit information and protect themselves against unauthorized use. When a credit freeze is in place, the consumer must lift the freeze temporarily or permanently when they wish to allow access to their credit report for loan applications or other purposes.

The other options do not accurately describe a credit freeze. Increasing a consumer's credit limit or lowering interest rates relates to adjustments in credit terms rather than access to credit information, while notifying creditors about a consumer’s financial status does not involve restricting access to their credit report in any way.