Credit Freeze vs. Lock: What’s the Difference?

With all our technology and connectedness comes a price, vulnerability. Now more than ever before, our credit and identities are at risk from cybercriminals, thieves, and hackers. We, as consumers, must do all we can to protect ourselves against our most personal details falling into the hands of these perpetrators. 

Both Experian and Equifax experienced serious data breaches, and millions of Americans were affected. Did you know that American adults lost a total of $43 billion to identity fraud in 2023 alone? This alarming statistic highlights the growing need for robust measures to protect personal financial information from fraudulent activities. A couple of tools that people use to protect their identities are a credit lock and a credit freeze. Both options prevent someone other than you, from accessing your credit report and using it to open new accounts. Let’s explore a credit lock and a credit freeze to see, which is a better option for you.

What is The Difference Between a Credit Freeze vs Credit Lock?

The main difference between a credit freeze and credit lock is that while freezing your credit you restrict access to your credit report. It’s legal protection in contrast with credit lock. 

All three of the major credit reporting agencies (Equifax, TransUnion, and Experian) allow you to engage a lock on your credit. Credit bureaus are pushing this newer service because they often charge fees, and it’s quick and easy.

However, be warned, a credit lock is not government-sanctioned or regulated, so you are not as protected with a credit lock as you are with a credit freeze.

What is a Credit Freeze?

A credit freeze is a security technology that restricts access to your credit report, but it’s also protected by law. If you order a credit freeze on your account, you must provide lenders with a PIN so they can access your credit report when determining your creditworthiness.

The federal government requires that all credit reporting agencies offer free credit freezes to their customers under The Fair Credit Reporting Act. Anyone requesting a freeze will need to do so for each of the major credit reporting agencies. Because they all operate independently, missing one means your credit information is still fair game.

When freezing your credit, you’ll want the following information on hand:

• Social security number
• Current and past addresses (up to two years)
• Date of birth
• Government identification
• Utility bills, pay stubs, or bank statements

By law, credit bureaus must activate a credit freeze within 24 hours of receiving a request by phone or online, and they must lift a freeze within one hour of receiving a request to do so online. But you can turn your freeze on or off in near real time by toggling a security freeze on or off in your account.

No one without a PIN can access your report. You can “thaw” or lift the credit freeze at any time by calling, through the mail, or online. You will need to verify your identity and fill out a form with each one of the credit bureaus to remove it.

Losing your PIN will make it significantly harder to thaw your credit freeze, especially if you can’t verify your identity another way. Agencies will likely require you to send in secondary documentation like utility bills, proof of address, or even pay stubs.

This is troublesome for anyone applying for a new account or loan. So, make sure to undo your freeze ahead of time if you’re trying to open anything that requires an in-depth credit review. 

What is a Credit Lock?

A credit lock is a temporary tool that you can use to restrict access to your credit report. You can unlock your credit at any time through a mobile app or through the internet, with the click of a button. It is entirely automated, which is why they sometimes charge fees. Credit reporting agencies promote these user-friendly options over a credit freeze because they are easier to manage and maintain.

Some consumers enjoy credit lock over a credit freeze because they do not have to remember a personal identification number (PIN). Experian also offers bundled services with its CreditWorks and IdentityWorks products.

Some of the perks of a credit lock with Experian are copies of your credit report, your FICO score, identity theft insurance, and dark web monitoring of your sensitive information. TransUnion also offers identity theft insurance, debt analysis, and access to an ID theft specialist with their products. Equifax offers a free product called Lock & Alert, but it’s pretty bare bones without a lot of fanfare.

Who Can Access My Report with a Freeze?

A credit freeze is your best bet against a criminal using your identity to obtain credit. However, know that there are still a few organizations and businesses that can access your credit report. Exceptions to the credit freeze include the following:

• Creditors you have an existing account with
• Credit monitoring services
• Government agencies and investigative bodies
• Debt collectors

The government will request frozen credit reports if they’re relevant to a court case or if you’re suspected of fraud. Otherwise, organizations that you’ve willingly entered into financial agreements usually retain access to your credit reports.

When to Start a Credit Freeze

It’s essential to remember that a credit freeze or credit lock won’t prevent your identity from being stolen. Neither option does anything to keep your personal identifiers from falling into criminal hands, but they can prevent those same criminals from ruining your finances. A credit freeze can prevent criminals from opening new credit accounts in your name, thereby protecting your financial identity.

If you notice signs that someone has stolen your identity, we recommend you get a credit freeze immediately. This is a rather extreme measure and should be reserved for situations where you reasonably suspect your data has been compromised.

For example, if a company you’ve given information to experiences a data breach or if you notice unfamiliar charges on your credit card. Both are warning signs that your identity was stolen or you’re at an increased risk of it.

However, it often takes weeks or even months to realize your identity was stolen. So, if you don’t mind the additional upkeep and management that comes with a credit freeze, then there’s no reason not to start one today. Currently, it’s the easiest and least expensive way to protect yourself and buy more time to react to a stolen identity.

When to Start a Credit Lock

If money isn’t a problem, then you should always have your credit under a lock. Unlike a freeze, there’s no delay in switching a lock on and off. All it takes is the swipe of a finger, and your bank, apartment office, or HR department can review your credit immediately.

However, locking your credit isn’t as cheap as it used to be. TransUnion previously offered a free credit lock service alongside Equifax, which was still recovering from a ground-shattering data breach. Today, both TransUnion and Experian charge for their credit locks while Equifax maintains its “Free for life” stance.

Remember that if you want your locks to be effective, you’ll need to pay for both of these options. The total cost is more than a couple of streaming subscriptions per month. If you do not need anyone to approve your credit anytime soon, it’ll be best to choose a credit freeze instead. 

How to Lock Your Credit

Unlike credit freezes, credit locks are unregulated, and all three of the credit reporting agencies do not guarantee their uptime or error-free operation. You take a risk using something like that on your crucial credit report and personal information.

To fully lock your credit, you will need to contact each of the three major credit bureaus separately to arrange it. Their information is below:

•  Equifax Credit Lock
•  Experian Credit Lock 
•  TransUnion Credit Lock 

If you have been the victim of a data breach or identity theft, you may want to consider a credit freeze instead. 

How to Freeze Your Credit

If you have experienced identity theft, and are thinking about freezing your credit vs locking, credit experts advise against a credit lock in favor of a credit freeze. Freezing your credit file can prevent unauthorized access by lenders and protect your financial information. If your data was exposed, you want the most secure protection available, then a credit freeze is the way to go.

While a credit freeze is the much more secure option, it won’t hinder you from monitoring your information. You’ll still be able to personally receive credit reports even while a freeze is active on your account.

To impose a credit freeze on your credit, you will need to contact each of the three credit reporting agencies individually. Here are the three credit bureaus phone numbers and how you can reach out them :

• Equifax - 800-685-1111, or by mail at P.O. Box 105788, Atlanta, GA 30348-5788.
• Experian - or in writing at P.O. Box 9554, Allen, TX 75013, or call 888-EXPERIAN (397-3742).
• TransUnion - by mail at P.O. Box 2000, Chester, PA 19016, or by calling 800-909-8872.

How to Freeze Credit for a Child

You may want to consider freezing your child’s credit until he or she is an adult. As a parent or legal guardian of a child under 16 years old, you contact three credit report bureaus and put a freeze on their credit. Be aware that there can be a small fee. Child identity theft is a significant concern for many U.S. parents.

Reducing Your Risk and Avoiding a Credit Freeze or Lock

Rather than responding to a stolen identity, it’s best to keep your information safe in the first place. Monitoring your credit scores regularly can help you detect any unusual activity and take action promptly. Of course, you can’t avoid some situations, but implementing these habits will minimize the risk of your information falling into the wrong hands.

Give Personal Information Sparingly: Many people have gotten accustomed to filling out the entire form, even if the box isn’t required. Try to avoid giving businesses and organizations more information than they need. You never know when they’ll become the victim of a data breach.

Keep Strong Passwords with a Password Manager: A password should be as varied and complex as possible. Most websites encourage using a mix of uppercase, lowercase, numbers, and special characters. However, it’s hard to keep track of each password if you make them all different (as you should.)

A password manager not only creates a unique and random password for you, but it stores and auto-fills them in one convenient place.

An Alternative to a Credit Lock or Credit Freeze - Fraud Alert

Another option instead of a credit freeze or credit lock is a fraud alert if you have been the victim of fraud. A fraud alert puts a notice on your credit report (without locking or freezing anything) to notify lenders that you have experienced fraud or identity theft. They then need to take extra precautions to verify your identity before lending you any money or opening new lines of credit.

There are three types of fraud alerts:

Initial Fraud Alert: The most basic fraud alert is available to anyone. Prove your identity and this alert will last for an entire year and can be renewed indefinitely.

Extended Fraud Alert: This option is available to the victims of identity theft and lasts for seven years. Applicants must prove their situation by sending in a report from the Federal Trade Commission or a police report. You’ll automatically be removed from marketing lists for five years and receive a free credit report each year.

Active-Duty Fraud Alert: This alert is available for members of the military serving a remote deployment. It lasts one year and can be renewed if you prove you’re still deployed.

All these will be lifted at the end of your subscription, but they can be removed early at your request. If you cancel a fraud alert, make sure you have another way to protect your credit, whether practicing self-monitoring techniques or initiating a credit freeze. A single mistake with your credit can lead to years of issues, so it’s best not to take any chances.