Fraudulent loans and credit card charges can wreak havoc on your credit score and peace of mind. Credit locks and credit freezes protect your credit report from scammers looking to take out new credit cards or loans in your name. The tools provide similar security measures, but they have subtly different features. While both tools may have a place in your security toolkit, understanding each one’s function, advantages, and disadvantages could help you find the right fit for each situation.
Key Considerations
- Both credit locks and credit freezes prevent fraudulent accounts by restricting access to your credit report.
- Credit locks are often paid services, while credit freezes are free and subject to specific federal laws.
- Other tools for protecting your credit report include credit monitoring and fraud alerts.
What’s a Credit Lock?
A credit lock is a service (usually paid) that restricts access to your credit report. Lenders like banks and credit card companies almost always pull your credit report to assess your credit history before offering you financing. However, with a credit lock in place, new lenders can’t access your credit file, so they can’t offer new credit. This precaution stops scammers from opening new accounts in your name. If you want to apply for a new credit card or loan, or if anyone else needs access to your credit file, you have to unlock your credit. Keep in mind that existing creditors retain access to your locked file.
All three major credit bureaus—Experian, Equifax, and Transunion—offer paid credit lock services, sometimes as part of a broader security suite. You may be able to purchase additional security features, like theft insurance or fraud alerts. You can buy a credit lock online from each credit bureau’s website. Most operate under a subscription model that requires a monthly fee.
To lock your credit, you must provide proof of identity, typically online. After you’ve provided the necessary documentation, credit locks go into effect instantly. If you can’t provide proof of identity online, you may do so via mail.
Credit locks aren’t governed by any specific federal guidelines or laws, so it’s essential to understand your risks as a consumer. There’s no guarantee of continuous service without errors. Credit bureaus may require you to sign a contract forfeiting your right to a lawsuit if something goes wrong and compromises your security.
How Do You Unlock Your Credit?
Unlocking your credit report is typically as easy as clicking a button on the credit bureau’s website or mobile app. Most credit bureaus allow you to toggle your credit lock on and off instantly.
What’s a Credit Freeze?
Federal law requires each of the three major credit bureaus to freeze credit reports upon consumer request at no cost. Like a credit lock, a credit freeze restricts access to your credit file so that no new accounts can be opened in your name. All three credit bureaus have online freeze request forms that require personal information, including your Social Security number and address history. You could also request a credit freeze by phone or mail.
Once you confirm your identity, credit bureaus may require you to set a PIN or password. To manage your credit freeze in the future, you’ll need to verify your identity with the PIN or password you set. If you lose track of it, you might have to prove who you are by providing documentation again.
It’s best to freeze your credit at all three bureaus for the most thorough protection.
Credit freezes must adhere to specific federal laws, meaning you have more consumer protections. Per federal guidelines, credit freezes must go into effect within 24 hours of the bureau receiving a request.
How Do You Unfreeze Your Credit?
In order to unfreeze your credit report, you have to verify your identity with the credit bureau(s). You typically set a PIN or password to freeze your credit. When you want to unfreeze your credit file, you can use the PIN or password to verify your identity online, by phone, or by mail. Because credit freezes are subject to federal regulation, credit bureaus must thaw your account within an hour of receiving an online request or three days of receiving a request by mail.
Credit Freeze vs Lock: Which Is the Best Fit?
Credit freezes and locks are both useful tools. The best fit depends on your unique circumstances.
When to Use a Credit Freeze
When you know your credit card information has been compromised in a breach or leak, freezing your credit right away could protect your accounts from further damage. A credit freeze could provide you with added security.
Minors’ credit card files may be especially vulnerable to identity theft and fraud. If you’ve added a child as a co-signer on your credit card account, you may want to freeze their credit until they’re old enough to apply for their own credit cards.
When to Use a Credit Lock
Because credit locks are so flexible, they’re an effective precaution for anyone who wants security but also the abilityto access additional information when needed. If you want to apply for a new line of credit or need to provide anyone with access to your locked credit report, you can temporarily unlock it. Because you can relock your credit report in moments, your account doesn’t stay vulnerable very long.
Other Tools for Protecting Your Credit File
Credit locks and freezes are important measures for protecting yourself from fraud. However, the most effective approaches to data security employ freezes or locks alongside other protections. Consider the following:
Fraud Alerts
If you’ve already experienced identity theft or fraud, you may want to secure your account further with a fraud alert. With an active fraud alert, your credit file will contain a message for potential lenders explaining that you may have experienced identity theft or another form of fraud. Before a business can open a new account in your name, they have to notify you by verifying your identity. That way, you’ll know if anyone tries to take out a loan or line of credit in your name without your permission. Fraud alerts are free to set up through each credit bureau.
Standard fraud alerts last one year and are available to anyone who believes they may have fallen victim to fraud. After the year ends, you can renew your alert. For an extended fraud alert, which lasts seven years, you must show that you’ve definitively had your identity stolen by filing an identity theft report or police report.
Credit Monitoring
Even if your credit card information hasn’t been compromised, credit card monitoring could offer you security and peace of mind. Credit monitoring tools notify you of any significant activity on your file—like a new account opening or a hard credit pull. That way, you won’t miss any suspicious activity or errors in your credit.
You typically have to pay for credit monitoring services. Many come with credit lock options.
If you receive an alert from a credit card monitoring service and don’t recognize the activity, you can immediately freeze or lock your credit file and notify your credit card issuer.
Zero Impact to Your Credit Score When You Apply for a Personal Loan from BHG Financial1
Credit card fraud and identity theft may hurt your credit score and make it difficult to access financing when you need it. That’s why security tools like credit locks and freezes are vital to your financial well-being. They offer you protection so that you can still apply for additional funds when it comes time to unlock or unfreeze your credit, whether you have to cover an emergency home repair or consolidate high-interest debt. With a personal loan from BHG Financial, you could receive up to $200,0002 in as few as five days.3 Plus, we only conduct a soft credit pull when you apply, so applications won’t damage your credit score.1
FAQs: Freezing Credit vs Locking Credit
Will a credit lock or credit freeze hurt my credit score?
No, credit locks and freezes have no effect on credit scores.
When should I freeze or lock my credit?
You could freeze or lock your credit report as a precaution or if you believe your personal information has been compromised.
