Credit freezes have been available for free at Equifax, Experian, and TransUnion since 2018. They are designed to block many forms of identity fraud, particularly fraudulent new credit applications. However, recent statistics highlight why relying solely on a freeze is insufficient.
Rising Trends in Identity Fraud
According to the Javelin Strategy & Research’s Identity Fraud Study, traditional identity fraud losses hit $27.3 billion last year, impacting some 18 million people. There was a notable 31% increase in new-account fraud from 2024 to 2025.
“Synthetic identity fraud pairs a real Social Security number with a fabricated name and date of birth, bypassing credit freezes.”
Understanding Synthetic Identity Fraud
The Federal Reserve identifies synthetic identity fraud as a significant oversight in existing defenses. This type of fraud uses a genuine Social Security number, but with a fabricated name and date of birth. Thus, credit applications filed under these new identities can go undetected by existing credit freezes.
Limitations of Credit Freezes
A credit freeze only restricts access to your credit file by lenders, who thereby reject applications lacking verification. Yet, it does not block all types of fraud.
- Credit card fraud: 503,450 reports were made to the FTC in early 2025 alone.
- Synthetic fraud: Often not recognized until it’s too late.
Frauds that do not rely on credit bureau checks, such as email changes or unauthorized charges on existing accounts, are undeterred by a freeze.
Additional Measures Beyond Credit Freezes
Although credit freezes are valuable, they work best in conjunction with other protective measures:
- Alerts: Set up alerts with your banks and credit cards to track any significant changes or transactions.
- Regular Checks: Routinely review your credit reports for discrepancies or unknown activities.
- Password Protection: Use unique passwords, a password manager, and two-factor authentication to secure your accounts.
- Identity Monitoring Services: Consider services that continuously track your credit file and alert you to new activity.
Tackling Synthetic Identity Fraud
For synthetic identity fraud, the bureaus often create new files when they see a recognized SSN coupled with a new name. By the time the new identity seems legitimate, significant financial damage can occur. The U.S. lenders faced $3.3 billion in synthetic fraud exposure by the end of 2024.
An effective response involves:
- Continuous Monitoring: Employ identity theft protection services that scan both credit bureaus and dark web platforms.
- Fraud Resolution: Some services offer recovery support and insurance against identity theft damages.
Conclusion
While a credit freeze can prevent many fraudulent credit applications, it is not a complete safeguard for your financial health. Incorporating identity protection, consistent vigilance, and secure account practices form a comprehensive defense against potential fraudsters. These measures ensure you are watching what happens both inside and outside your frozen credit file.