To protect yourself against identity theft, data breach, or credit card fraud, limit access to your credit reports with either a credit lock or a credit freeze.
A credit lock and a credit freeze are similar in various ways, but there are significant differences between them. In this article, we will take an in-depth look at these services so you can use the one that is suitable for your situation.
Why Limit Access to Your Credit?
If someone steals your personal information, limiting access to your credit will protect you from damage. For example, if someone has your social security number, they can use this information to open a credit card account. Without access to your credit reports, however, their bogus application will be denied.
Both a credit freeze and a credit lock will limit access to your report, and neither one of these services will affect your credit score. Additionally, since these services only prevent hard credit inquiries, getting a credit freeze or lock will not prevent you from receiving prescreened offers of credit via mail.
For a credit freeze or lock to be effective in limiting access to your credit, you have to place it on your Equifax, Experian, and TransUnion credit reports individually.
What is a Credit Lock?
A credit lock limits access to your credit report, and it is governed by a contract between you and the credit bureau. You can activate or deactivate a lock online or via an app, using a username and a password.
One of the benefits of a credit lock is that it is convenient to use. You can allow lenders access to your report in a matter of minutes. When a lender has all the information they need, you can activate the lock again from your smartphone.
While some credit bureaus offer credit locks for free, you may have to pay a monthly fee for this service. Credit locks are provided by all credit bureaus as well as anti-fraud services.
What is a Credit Freeze?
According to federal law, you can request a credit freeze at no cost. This service is designed to limit access to your credit report, which protects you from credit fraud as the result of identity theft.
You initiate a freeze with each of the credit bureaus, and once activated, the freeze can last indefinitely until you “thaw” your file. In some states, a freeze expires after seven years.
A credit freeze is not as convenient as a credit lock. You must thaw and refreeze your account with a personal identification number (PIN), and you have to do it via mail or phone. You can also lift or authorize a credit freeze online.
Unlike credit locks, a credit freeze is only administered by the credit bureaus, and it is governed by federal law. A credit freeze is also safer than a credit lock as you are legally protected against losses by federal law.
A credit freeze is free in every state, thanks to the Federal Economic Growth Act, the Regulatory Relief Act, and the Consumer Protection Act.
Unlike a credit freeze, you may have to pay a fee to lock your credit file. Experian charges $4.99 for the first month and $24.99 for every additional month. TransUnion offers a credit lock service for free, but you can bundle it with credit monitoring for $24.95 per month. Equifax provides a credit lock service for free.
Using only the free credit lock services will not be sufficient to protect you from credit fraud, however. You have to lock all three reports, which means you will have to pay at least $24.99 per month for a credit lock.
Since you can conveniently lift or activate your credit lock from your smartphone or tablet, many people prefer this service, but you have to pay for this convenience.
When to Use
You can activate a credit freeze with a pin. This adds a layer of security to prevent criminals from establishing credit in your name, even if they have stolen your personal information in an ID theft scheme.
A credit freeze is an ideal solution if your information has been compromised, you are a victim of credit fraud, or you want to prevent credit fraud. After freezing your credit reports, you will still be able to access your records and scores.
Lifting or authorizing a credit freeze can take from one hour to three business days, depending on whether you make the request electronically, by phone, or by mail.
A credit lock is the best preventative measure if you believe that someone has access to your information because it prevents others from accessing your credit information. Unlike the freeze, a credit lock is administered by the three credit bureaus and anti-fraud services.
Each service has its drawbacks and benefits. A credit freeze is free, the pin provides additional security to your credit report, and the terms of this service are set by federal law to protect your interests. The drawback of a credit freeze is that authorization or thawing can be sluggish and time-consuming.
A credit lock is more user-friendly than a credit freeze. You can quickly lift or authorize a lock to give lenders access to your credit record. Credit locks aren’t always free, however, and since you have to lock all three of your credit reports, there is no getting around the costs.
Additionally, the terms of a credit lock are set out by the service agreement between the consumer and the credit bureau – not federal legislation. These terms are not always in the consumer’s favor, making a credit freeze more suitable option for some.
A credit freeze and a credit lock work in similar ways to protect your credit records and keep you from going through credit repair. Because of federal law, a credit freeze offers additional legal protection that a lock doesn’t.
If you are willing to pay for added convenience, however, a credit lock may be the ideal option.