Legal Definitions - credit freeze

A credit freeze is a government-mandated restriction on bank-lending. During a credit freeze, banks are not allowed to lend money to individuals or businesses. This is done to prevent economic instability and protect consumers from taking on too much debt.

• During the 2008 financial crisis, the US government implemented a credit freeze to prevent banks from lending money to risky borrowers.
• In some cases, individuals may choose to initiate a credit freeze on their own credit reports to prevent identity theft and unauthorized access to their credit information.

These examples illustrate how a credit freeze can be used to protect the economy and individual consumers from financial harm.