Does a Credit Freeze Affect a Background Check?

A credit freeze, or security freeze, is a frequently used step if you’ve been the victim of fraud — particularly identity theft. It effectively freezes your credit reports, meaning any company trying to access them runs into a brick wall. So why would you want to do this? 

If someone tries to open a new line of credit in your name, a check is necessary before it can happen. However, if a bank, lender, or creditor finds the reports frozen, the process cannot move on to the next stage, meaning the application is rejected. So, the fraudster can’t go ahead.

However, not everything is entirely blocked by a credit freeze. Your existing creditors, government agencies, and certain companies with legitimate reasons may still be able to gain access to your reports. If you’re applying for a mortgage, a loan, and even some jobs, you may need to unfreeze your credit reports temporarily. 

So how easy is all this? In most cases, freezing and unfreezing your credit is relatively simple and shouldn’t cost you anything. The three major bureaus are Experian, Equifax, and TransUnion, and each allows you to manage your reports and their frozen status online, by phone, or through written request.

It depends on what kind of background check is being conducted. Most employment background checks don’t go anywhere near your credit score, meaning it doesn’t matter if it’s frozen. These will usually focus on verifying employment history, criminal records, and education, all publicly available information.

However, there are some jobs out there that will look at your credit score. These are typically in financial services, executive roles, or positions handling money – and they must legally tell you that they will look at your credit score during the background check. Here, employers aren’t looking specifically at credit score, per se, but major financial red flags—things like excessive debt, bankruptcy, or delinquent payments.

It all depends on the position. It’s also worth noting that employers must have written consent before pulling a credit report — according to the Fair Credit Reporting Act (FCRA) — so there shouldn’t be any surprises along the way.

Not taking action after a potential employer tells you they’ll need access to your reports when you know full well that they’re frozen will delay the employment process. If an employer needs those reports to approve your application, there’s no way they’re going to do it without them, so candidates need to take action.