Since news of the Equifax hack broke, you might be wondering what are the differences between a credit lock vs credit freeze.
We’ve seen the terms credit freeze (also called a security freeze) and credit lock used interchangeably by some folks, and while they offer a similar protection, there are key differences.
In this blog post, we’ll go over those differences and share some reasons you might want to employ one over the other.
First things first, the credit reporting agencies would rather have you lock your credit than freeze it. As this Consumer Reports article points out, “the credit bureaus are pushing consumers to lock their credit instead of freeze it, but there are reasons to be wary.”
A credit freeze, also known as a security freeze, “lets you restrict access to your credit report, which in turn makes it more difficult for identity thieves to open new accounts in your name,” according to the Federal Trade Commission. “That’s because most creditors need to see your credit report before they approve a new account. If they can’t see your file, they may not extend the credit.”
A credit lock is similar, although you can lock and unlock your account online or via an app. A lock doesn’t have the legal protection a credit freeze does — more on that in a minute.
Key Differences Between a Credit Lock vs Credit Freeze
- Activating and lifting a credit freeze can be time-consuming, taking up to 24-48 hours, though our firsthand experience is that it can take only minutes. Basically, you get a PIN number when your freeze goes into effect, which you then use to lift it in the future. You should definitely keep this PIN number in a safe place and take care not to lose it.
- Locking and unlocking a credit lock is reportedly faster than a freezing and unfreezing a credit freeze, at least done through Experian and TransUnion; you don’t need a PIN, it can be done online and happens immediately. Equifax says its lock product (part of TrustedID Premier) takes 1-2 days to unlock (same as a freeze).
- The fees for adding and removing a credit freeze vary by state (often times $5-$10). It’s free to put a freeze on your Innovis (a smaller credit reporting agency) report.
- It’s free to lock your credit through TransUnion. Currently, it’s $4.95/month to lock your credit with Equifax (free lifetime service available by Jan. 31, according to Equifax). You also have to pay to do it with Experian (the subscription-based product is called Experian CreditLock and costs $4.99 for the first month and $24.99/month thereafter; it also includes monitoring and access to your Experian credit score and report).
- Credit freezes are covered by state law, meanwhile, credit locks, which are just a contractual agreement, are not. Thus far, Equifax has not disclosed “whether a consumer would have to sign an arbitration clause to use the credit locking service,” according to this CNN Money story, which makes the credit freeze certainly look like the better option.
Want to see more an additional side-by-side comparison? NerdWallet has a great infographic comparing credit freezes and credit locks side by side.
The Bottom Line
“In most cases, a credit freeze offers better protections against fraud and can be cheaper, making it the best option,” according to the Consumer Reports story.
Our lead identity theft restoration specialist, Suzanne Ford, agrees and suggests that anyone who has a Social Security number freeze their credit reports. She’s personally found lifting credit freezes to be fairly easy.
“While working the victim cases, my clients and I have been able to access the reports immediately after calling and lifting their credit freeze,” Ford said. “I suggest that if someone (who has frozen their credit) is going to apply for credit, that they contact the merchant, verify which reporting agency(s) will be used to complete the application process and how long the process takes so that the applicant can do a temporary lift of the freeze to complete the process.”
And just to bust any myths you might have heard, a freeze won’t affect your credit score and won’t keep your existing credit card companies or mortgage lenders from updating your report. Unfortunately, it also will not stop companies from sending you pre-approved offers, and it won’t do anything to prevent fraudulent purchases on your current accounts (so still watch those closely, please).
Remember, you need to enact the credit freeze at each of the bureaus, not just one. For detailed information on how to do it, take a look at our post “Why You Should Consider Freezing Your Credit and How to Do It.”
It’s important to remember that even if you have your credit frozen, there are still ways criminals can steal your identity and it’s important to understand the limitations to a credit freeze. Unfortunately, there are many types of identity theft that won’t even show up on your credit report.
LibertyID is the AAA of identity theft protection, offering the most effective identity theft restoration and protection service. Sign up for an annual subscription and rest easy knowing that if your identity is stolen, we will fix it. There’s no limit to the time or money we will spend restoring your identity to pre-event status. A certified restoration specialist will handle all of the legwork and keep you informed with regular status updates. But just like with AAA, you have to be covered before there’s an incident.
Photo Credit: Cold Fusion, LadyDragonflyCC, Creative Commons Attribution-ShareAlike 2.0