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Should I Elect A  Credit Lock or Freeze? Thumbnail

Should I Elect A Credit Lock or Freeze?

Financial Planning General

In today's increasingly connected world, protecting your information is more important than ever. Your credit report consists of a lot of personal information, such as your financial activity, credit accounts, loans, payment history, and more.1 Because of this, credit bureaus such as Equifax, Experian, and TransUnion often offer credit locks and freeze as a security feature to help protect consumers from identity theft and fraud.

Here, we'll explore what a credit lock is, how it differs from a credit freeze, and whether or not it's a good idea to accept a free credit lock offer.2

What is a Credit Lock?

A  credit lock can be used as  a preventive measure to protect your information. It is convenient and lets you quickly unlock to  allow lenders access to your report before you immediately lock it again. This flexibility is important  when you are shopping for a mortgage or  car. However, there are also some potential downsides to using a credit lock. One of the biggest concerns is that a credit lock applies only to the selected credit bureau. So, if you want to protect your credit fully, you’ll need to place a lock on all three main credit reports.

While the initial lock may be free, some credit bureaus may charge a fee to remove or temporarily lift the lock, depending on their terms and conditions. In addition, each bureau’s service agreements clarify that they don’t guarantee error-free operation or uninterrupted service.

The three main credit bureaus may charge a fee for their credit lock services:

  • Equifax’s free credit lock product is called Lock & Alert, and the company says it will be free for life.3
  • TransUnion’s free product, administered under the company’s TrueIdentity brand, offers the lock/unlock option and other features, but they may charge a fee to release or for other services.4
  • Experian bundles its credit lock with other services, including identity theft insurance and alerts about when information changes on your report at all three bureaus.This service costs start at $9.99/month.

What is a Credit Freeze?

When you freeze your credit, you restrict access to your credit report. Most lenders can’t see your information until you unfreeze it. A credit freeze helps protect your credit report. It’s a smart option if you’re a victim of identity theft or believe your information has been compromised. Unlike a credit lock, a credit freeze applies to all three credit bureaus. If you place a credit freeze on your credit report, no one can access your credit information without your permission. Credit freezes are also governed by federal law, unlike credit locks.

While a credit freeze may provide stronger protection than a credit lock, it also has some downsides. For example, temporarily lifting a credit freeze can be more difficult if you need to apply for credit or open a new account.

Should I Accept a Free Credit Lock?

Whether or not you should accept a free credit lock offer depends on your individual needs and circumstances. A credit lock may be a good option if you're concerned about identity theft or fraud. It provides an extra layer of protection that can help prevent unauthorized access to your credit report.

However, a credit freeze may be a better option if you want to fully protect your credit. While lifting a credit freeze temporarily may be more inconvenient, it provides stronger protection than a credit lock.6

How to Protect Your Credit

In addition to credit locks and freezes, there are other things you can do to protect your credit:

  • Monitor your credit report regularly for any suspicious activity.
  • Sign up for fraud alerts, which will notify you if suspicious activity is detected on your credit report.
  • Use strong, unique passwords for all your financial accounts and change them regularly.
  • Regularly review your bank and credit card statements for any unauthorized transactions.
  • Be careful about sharing personal information online or over the phone, and only provide it to trusted sources.

A credit lock can be a useful tool in protecting your credit. However, it's essential to understand the differences between a credit lock and a credit freeze and the potential costs involved ("free" credit locks aren't always free).

  1. https://tobininvestmentplanning.com/financial-tips/what-data-is-included-in-your-credit-report
  2. https://www.nerdwallet.com/article/finance/credit-lock-and-credit-freeze 
  3. https://www.equifax.com/personal/products/credit/credit-lock-alert/
  4. https://www.transunion.com/product/trueidentity-free-identity-protection
  5. https://www.experian.com/consumer-products/creditlock.html
  6. https://consumer.ftc.gov/consumer-alerts/2018/09/free-credit-freezes-are-here