The term "credit lock" and "credit freeze" are often used interchangeably. You may even see some credit bureaus advertising these services side-by-side. However, they are not one in the same. While both can be used to block the accessibility of your credit report and help keep your identity safe, they are best applied to different situations.
Find out the difference between a credit lock and a credit freeze, as well as the best use cases for each.
What Is a Credit Lock and When Should You Use It?
A credit lock makes it impossible to pull your credit report for a given amount of time. When you institute a credit lock, it keeps your credit reports from being pulled from all three of the major consumer credit bureaus -- Equifax (EFX - Get Report) , Experian (EXPGY) , and TransUnion (TRU - Get Report) . Lenders use these reports to open new financial accounts in your name.
Credit locks are best used as a preventative measure against potential identity theft. Because credit locks are easy to institute and lift at will, you can lift the lock before making a planned major purchase -- such as a car or a home -- or opening a new account.
What Is a Credit Freeze and When Should You Use It?
A credit freeze, sometimes also called a security freeze, keeps the three credit reporting bureaus from providing your credit report to any lenders. In this way, it is quite similar to a credit lock.
Credit freezes are incredibly useful if you are a victim of identity theft. If sensitive personal information has been seized or your personal data has been compromised, then criminals may be able to open new bank accounts, credit card accounts, and loans in your name. Freezing your credit prevents this, keeping your accounts under your control even during times of crisis.
Credit Freeze vs. Credit Lock: Key Differences
On the surface, it may seem that credit freezes and credit locks perform the same function. While both prevent accounts from being opened in your name and provide an essential service, there are some key differences that separate them from each other. Discover these differentiators below.
Speed and Ease of Access
By design, the process of instituting a credit freeze is much more arduous than instituting a credit lock. When you request a credit freeze, you must provide the following information:
- Social Security number
- Additional personal information
Once this information is processed and the credit freeze is set, you are provided with a number that is associated with the freeze. Typically, this pin will also be contained in a follow-up letter sent from each credit bureau. Once you are ready to thaw your credit, you must provide the number to the credit bureaus to confirm your identity. It can take up to three day to unfreeze or "thaw" your credit.
Credit locks are much easier to request. Though each credit bureau has a slightly different process, most allow you to lock and unlock your credit via phone, mobile app, or online once you are enrolled in the program.
Because credit freezes are governed by federal law, they are treated differently than credit locks. All three credit bureaus offer some form of credit freeze for free if you are a victim of identity theft, as mandated by the government. If you are over the age of 65, you may receive a free or discounted credit freeze -- even if you want the freeze for a different reason.
However, consumers below age 65 who want to freeze for other reasons may need to pay a fee for freezing your credit, lifting the freeze temporarily, or permanently removing the freeze. The exact cost varies per state.
On the other hand, credit locks are treated like a credit reporting bureau product and are not overseen by federal law. Two of the credit reporting bureaus -- Equifax and TransUnion -- offer their credit lock services for free, but Experian charges a monthly fee for the service.
Since all lenders use different reporting bureaus to pull credit reports, it's recommended to freeze or lock your credit at all three bureaus for maximum protection.
Pros and Cons of Locking Your Credit
Placing a lock on your credit can be a great preventative measure, but as is the case with any action, it has its pros and cons. Here are some of the benefits and detractors of locking your credit file.
Pros of a Credit Lock
- Provides Proactive Protection:
- Convenience: Being able to lock and unlock your credit at any time provides you with ample opportunities to make bigger purchases or access your credit report when needed. There is also no waiting period for the lock to turn on or off.
Cons of a Credit Lock
- Price: Locking your credit with Experian will cost you a monthly fee. Unfortunately, you must lock your credit with all three bureaus to get full protection, so this fee can't be avoided.
- Not Dictated by Law: Because credit freezes are governed by federal law, they are required to be free. Credit locks are treated much more like a product offered by credit bureaus, meaning that their pricing, terms, and offerings are more likely to change from year to year.
Pros and Cons of Freezing Your Credit File
Instituting a credit freeze can be extremely helpful if your identity is compromised, but as is the case with any action, it has its pros and cons. See the benefits and detractors of locking your credit file.
Pros of a Credit Freeze
- Protects You When Compromised: If you have reason to believe that you are a victim of identity theft, a credit freeze is one of the best tools you can use to keep criminals from opening new accounts or taking out loans in your name.
- Price: Credit freezes are required to be offered for free if you are a victim of identity theft.
- Governed by Law: Because credit freezes are governed and guaranteed by federal law, the terms, conditions, and procedures for a credit freeze are more static than credit locks.
Cons of a Credit Freeze
- Tracking Your Pin: If you do not work through a company that will freeze your credit with all three credit bureaus, then you will need to track and safely store three different pins for each bureau. If you lose your pin, the bureaus will require additional information to verify your identity, making the unfreezing process take even longer.
- Slower to Start: If you want to lock your credit down instantly, then a credit freeze might not be for you. It can take up to five business days for the freeze to take effect.
- Less Convenient: Freezing your credit is a much more arduous process than locking your credit. It can be far more time-consuming to set up and dismantle a freeze.
Credit Lock vs Credit Freeze - Which is Better?
Because of the similarities between a credit lock and credit freeze, you may be wondering which one is better. The bottom line: It depends on your situation.
If you know that your information has a high chance of being compromised -- particularly if you were part of a data leak or similar -- then you may want to go with a credit freeze. Credit freezes are more secure than credit locks because they require much more verification information. It may take a little longer to freeze and unfreeze your credit, but the extra layer of security is worth it if you are at high risk. Credit freezes also provide additional protections that permit you to hold credit bureaus legally accountable if your information is leaked.
However, the convenience of a credit lock may be tempting. Credit locks are a perfectly legitimate way to protect yourself from fraud proactively and can be a great tool for deterring identity thieves. However, it will come at an extra cost and does not offer the same legal protections if your information is leaked by credit bureaus. Ultimately, it also doesn't offer the same level of security that a credit freeze provides. It may not be the best choice if you have recently been part of a data leak or similar situation.
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