Wondering about the difference between a credit lock vs. freeze? While both terms refer to a type of credit protection (and are often used interchangeably), there are some notable differences worth knowing about – especially if you’re looking for the best way to keep your credit and identity safe.
Here’s what to know, including what sets these two services apart and when you might want to use one over the other.
What is a Credit Lock?
A credit lock prevents most lenders from accessing your credit report or associated personal data. This prevents specific forms of identity theft by making it near impossible for scammers to open new accounts under your name since most lenders run a credit check before moving forward.
Credit locks can easily be enabled and disabled as needed, and are either free or available for a fee based on the reporting agency.
What is a Credit Freeze?
A credit freeze is another means of preventing lender access to your credit reports and is recommended as a preventative measure for consumers who aren’t planning on applying for loans in the near future. Simply put, credit freezes restrict access to your credit reports and prevent reporting agencies from sharing with third parties.
Credit freezes are free at all reporting agencies. Unlike credit locks, though, they’re a bit harder to undo since you can’t just toggle the freeze on and off with an app.
Credit Lock vs. Credit Freeze: Main Differences
The primary difference between a credit freeze and credit lock strategies is their cost and the amount of afforded protection.
Federal law requires reporting agencies to provide credit freeze services free of charge. It also requires that the freeze be put into place within 24 hours of the request. This ensures that all consumers have access to credit freezes and that they adequately serve as a proactive or defensive measure against identity theft.
Credit locks, on the other hand, are not federally regulated. As a result, reporting agencies can charge for the lock (though currently, Experian is the only one that does) and may offer less legal protection with the service. For example, while it is free, TransUnion’s credit lock service agreement bars users from arbitration or class action suits. It also requires that you sign up for targeted marketing materials.
Choosing the Right Credit Protection Strategy
It’s always a good idea to take steps toward protecting yourself from identity theft and credit fraud. And fortunately, credit locks and credit freezes will allow you to do this relatively easily. However, deciding which one is right for your situation ultimately comes down to your personal preferences and whether or not you’re looking for additional features or protections with the service, as well as which one you find easier to use.
Remember that with credit locks and credit freezes, you will need to enable the strategy at all three credit reporting bureaus. This ensures that you have complete protective coverage and will keep as many lenders as possible from being able to access your credit information.
Looking for a solution with a bit more flexibility? An alternative to credit locks and freezes is to put a fraud alert on your credit report. Fraud alerts do not block access to your reports, but they make it so lenders must get express permission from you before they can process a credit application or open up a new account in your name.
The Key Takeaway
Protecting your credit data is much easier than bouncing back from credit fraud. However, both credit freezes and credit locks do just that, keeping lenders out of your reports and preventing fraudsters from opening new lines of credit under your name.