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Credit freeze and credit lock are terms regularly used interchangeably, and you may even see credit bureaus advertising these services together. But, they’re a bit different when it comes to protecting your credit.
While both can be used to restrict access to your credit reports and keep your identity safe, knowing the differences between them can help you decide which is the best fit for your situation and better prepare you to protect your credit.
Credit freeze definition
A credit freeze is a secure way to restrict access to your credit report. Placing a freeze on your credit prevents anyone from opening up a new line of credit and using your information without you knowing. Because a credit freeze restricts access to new credit under your name, it’s a strong protection against fraud, especially for those dealing with identity theft.
The option to freeze your credit is protected by federal law, so the 3 credit bureaus—TransUnion, Experian, and Equifax—are required to provide this service to you free of charge. It actually can be a good idea in many cases to keep your credit reports frozen until you need to apply for a mortgage, credit card, or other types of loan.
Credit lock definition
A credit lock—another credit bureau offering—provides a quicker method of preventing lenders from accessing your credit. You can also activate and disable a credit lock instantly from a mobile app or secure website.
This means you can keep your credit accounts locked most of the time, but unlock them fast when looking to open a personal line of credit, such as an emergency loan. Similar to a credit freeze, a credit lock protects you in case someone tries to open a credit card account or take out a loan in your name. A credit lock is more of a quick fix; however, it must be requested from each credit bureau separately, and, in some cases, can entail a monthly fee.
Differences between a credit freeze and credit lock: What sets them apart?
A credit freeze and a credit lock can look like the same service. While both accomplish the same thing, certain elements do set them apart, which can make one more useful based on your situation. Here’s a visual breakdown of the differences to simplify if a credit freeze or a credit lock provides the best level of protection for your credit and finance:
|Credit freeze||Credit lock|
|What is the cost?||Free at each credit bureau||TransUnion: Free (under TrueIdentity brand)|
Experian: First 30 days free, then $9.99 per month for a service that includes credit lock; no stand-alone lock available
|Is it governed by law?||Yes, federal law provisions dictate that a credit freeze is available and free of charge to all consumers||No|
|How long does it take to go into effect?||No later than 5 business days after submitting your request||Can be instantly, but some credit bureaus take up to 48 hours|
|How long does it last?||It depends; indefinitely in some states, but 7 years in others||The length of your subscription to the service from the credit bureau|
When to use a credit freeze?
If you suspect you’re a victim of identity theft or your personal or financial information has been compromised in a data breach, you can freeze your credit. While preventing identity thieves from continuing to access your information, it also stops them from opening new accounts in your name. If you need to unfreeze your credit report, you can give authorization to each of the credit bureaus, through a protected account or by using your assigned PIN. Be aware that you still have access to your credit records and scores under a credit freeze and it doesn’t hurt your credit score.
Pros and cons of a credit freeze
The benefits of a credit freeze include security (freezes are protected by law, locks aren’t) and flexibility, meaning you can add and remove them from your report as needed.
However, be aware with credit freezes, you’ll most likely need to track and safely store a different PIN for each credit bureau. Also, if you want to lock your credit instantly, then a credit freeze might not be your best option since it can take up to 5 business days for the freeze to take effect.
How to freeze your credit report
You can freeze your credit with the credit bureaus over the phone, online, or by mail. However, you’ll need to request a credit freeze at each of the credit bureaus, which means contacting TransUnion, Experian, and Equifax separately. After verifying your identity and freezing your credit, you’ll be given a PIN, which you’ll need when it comes time to unfreeze it.
In general, a credit freeze lasts until you choose to unfreeze it, but this varies in some states, so be sure to check the laws and guidelines in your area.
To freeze your credit at each of the 3 credit bureaus, the information is as follows:
When to use a credit lock
Credit locks are best used as a preventative measure against potential identity theft and fraud. Like a credit freeze, it may make sense to keep your credit locked whenever you aren’t actively applying for a new loan or line of credit.
However, some experts recommend locking your credit only if you suspect fraudulent activity, so your credit is ready for lenders to access if you need to apply for credit. But, you can always use a credit lock as a proactive measure (even if no fraud is suspected) to ensure your credit is continuously protected.
Like a credit freeze, it typically makes sense to keep your credit locked whenever you aren’t actively applying for a new loan or line of credit, although some experts recommend locking your credit only if you suspect fraudulent activity. They suggest doing this so your credit is ready for lenders to access if you need to apply for credit. But, you can always use a credit lock as a proactive measure (even if no fraud is suspected) to ensure your credit is continuously protected.
Pros and cons of a credit lock
A credit lock can be more beneficial than a freeze since it’s quick and convenient. It also provides proactive protection in a timely fashion since you can place a lock on your credit within minutes.
The downside of a credit lock includes having to contact all 3 bureaus to get full protection. And, while some bureaus do offer this free of charge, others will present you with a fee, so be sure to check when looking to lock your credit.
Credit locks also aren’t protected by law, meaning you don’t have the right to one free of charge like you do with a credit freeze. This also subjects you to potential pricing and term changes from year to year.
How to lock your credit report
There’s no central place to lock all your credit reports at one time. Similar to a freeze, you’ll need to lock your credit reports at all 3 bureaus to ensure your information is safe.
Here’s how to lock your report with each of the major bureaus:
Is a credit freeze or credit lock a better option to protect my finances?
Deciding whether to use a credit freeze or a credit lock depends on your particular situation and needs. A credit freeze has the advantage of being free and backed by federal law. On the other hand, adding or removing a freeze can take some time, which can be inconvenient if you’re looking for a quick fix. A credit lock allows you to immediately lock and unlock your credit accounts, but it usually involves a monthly fee and can offer fewer legal protections.
How do I unfreeze my credit or remove a credit lock?
There are those times when you’ll need to unfreeze your credit, like when you’re planning to open a new credit card or buy or lease a car. If your credit file is under a credit freeze, you can request an unfreeze with each of the 3 credit bureaus. Just make sure to have your PINs accessible. If you placed a credit lock, you can unlock it instantly by simply visiting the mobile app or website you used to place the lock in the first place.
What are fraud alerts and when should I use them?
If you don’t want to deal with the cost of a credit lock or the hassle of a credit freeze, another option for protection that won’t affect your credit is a fraud alert. An alert tells lenders that they need to take extra steps to verify your identity before approving you for a new line of credit. In addition to being free, with a fraud alert, you only need to contact one credit agency, because they must notify the other 2 on your behalf.
What else can I do to protect my credit?
Putting a credit freeze or lock on your credit report is just one way to reduce your risk of identity theft. Other ways to take extra precautions include regularly monitoring your credit reports from all 3 major credit bureaus for any suspicious activity or incorrect information on your file. Also, make sure to not give out more personal information than necessary. Another way to protect yourself is by using different usernames and maintaining strong passwords for each account you have.
Freezing or locking your credit ultimately helps prevent unauthorized users from opening accounts in your name. If you don’t plan on applying for any new credit in the near future, a credit freeze may be the best option for protecting your credit. However, if you apply for new credit regularly, a credit lock might be more convenient to turn on and off on short notice.
Either way, make sure you continue to make credit monitoring part of your financial routine, along with protecting your personal information and using unique usernames and strong passwords to avoid the risk of identity theft. No matter what you choose, both credit freezes and credit locks are valuable tools in helping protect your identity!