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

A credit lock or freeze can be a good option if you need to restrict access to your credit report. People often use them if they're worried that fraudsters or criminals are trying to steal their credit and financial information. They're also an excellent way to prevent identity theft if you think someone is trying to open accounts in your name.

While credit locks and freezes achieve the same purpose, they are different. It's essential to understand each of them and how they work so that you know which method is right for you. To do that, we'll compare a credit lock vs. freeze to help you decide which one is right for you.

What is a credit lock?

A credit lock is when you restrict access to your credit reports and information. Credit file locks usually take effect faster than a credit freeze, but it varies from lender to lender. You will need to apply for a credit lock from each of the major three credit bureaus: Equifax, TransUnion, and Experian.

Unfortunately, there's no central hub or app where you can implement and monitor credit locks on all three credit reports simultaneously. The government does not monitor credit locks, so each credit bureau determines its own terms and conditions.

While credit locks are highly effective at protecting your information, they usually aren't free. You can opt for a simple credit lock from each credit bureau or choose them as part of a package deal with other features. Depending on the lender, this can include monthly credit reports, identity theft insurance, security alerts, and more.

Pros of a credit lock

Credit locks have several advantages to other security measures, including:

• Up to $1 million in identity theft insurance
• Quick protection for your credit accounts, reports, and information. Some creditors will instantly lock your credit, while others can take several hours to kick in.
• The option to instantly unlock and relock your credit at any time.
• The most secure way to restrict access to your credit account and personal information.

Cons of a credit lock

While credit locks have many advantages, they also have some disadvantages, including:

• A fairly high cost, depending on which credit union you go to. TransUnion has a monthly fee of $30, while Experian charges $25.
• Keeping legitimate creditors and lenders from accessing your credit information.

What is a credit freeze?

A credit freeze, sometimes called a security freeze, is a similar service to a credit lock. It's a great way to keep unwanted lenders and credit card companies from accessing your credit report. A freeze can also keep criminals from accessing your credit information and opening fraudulent accounts under your name.

The main difference between a credit freeze vs. lock is that freezes are governed by federal law. Credit freezes are also free to implement but can take several days to enact. As with a credit lock, you will need to apply for a freeze from each of the major credit reporting agencies. You can thaw and refreeze your accounts at any time, but the process may take longer than with a credit lock.

Pros of a credit freeze

Advantages of credit freezes include that they:

• Are completely free and don't have monthly fees.
• Don't have an impact on your credit score.
• Prevent identity theft and the opening of new credit accounts in your name.
• Are regulated by government laws rather than just the credit bureaus themselves.

Cons of a credit freeze

While credit freezes are great in certain instances, there are potential drawbacks. For example, they:

• Don't get implemented as quickly as credit locks.
• Take longer to unfreeze than a credit lock.

How to lock your credit

If you're interested in a credit lock, you will need to apply for one from each of the three major credit bureaus. While none of the services have an initial startup fee, all but Equifax have recurring monthly payments.

• Experian: To lock your Experian credit history and reports, sign up for their CreditWorks Premium service.
• TransUnion: To lock your TransUnion reports, you will need to sign up for TransUnion Credit Monitoring.
• Equifax: To lock your Equifax credit reports, you will need to sign up for Credit Lock & Alert.

Once you're enrolled in these credit-locking services, you can unlock and relock them as needed. You can keep doing this as long as you pay the monthly fee for each service and maintain your subscription. In addition to accessing your accounts online, you can also control each one through the app that accompanies each credit-locking service.

How to freeze your credit

Because freezing your credit is a free service, all you need to do is contact each credit bureau and ask them to freeze it. 

• Equifax: Call 800-685-1111, or mail your request to: Equifax Information Services LLC, P.O. Box 105788, Atlanta, GA 30348.
• Experian: Call 888-397-3742, or mail your request to: Experian Security Freeze, P.O. Box 9554, Allen, TX 75013.
• TransUnion: Call 888-909-8872, or mail your request to: TransUnion P.O. Box 160, Woodlyn, PA 19094.

Make sure you have the following information when you call the credit bureau:

• Your date of birth.
• The name on the credit account.
• Your address.
• The Social Security number associated with the account.
• Your driver's license or passport.

You can lock your own credit report or a report for your child as long as you have all the necessary information. Remember, a credit freeze takes slightly longer than a credit lock, and it could be several days to a week before the freeze occurs. If you want to temporarily lift the freeze, known as a thaw, the process will take just as long.

How to unfreeze your credit

To unfreeze your credit reports, contact the bureaus you used to freeze them online or by phone. While you can also notify them of your request by mail, doing so will take longer. Note that you’ll likely need to provide the PIN or password you received when you first froze your credit.

Choose the option that works for you

As you can see, credit locks and freezes are a great way to protect your credit accounts and information. If you're on the fence between a credit lock vs. freeze, weigh the pros and cons of either option. While the additional services and speed that come with a credit lock are convenient, not everyone wants to pay for them simply to restrict access to their credit.

If you need to borrow money but worry about hard credit inquiries that can decrease your credit score, consider a Payday Loan, an Installment Loan, or a Line of Credit from Advance America. We can help you get you the money you need without impacting your credit score. Start filling out your application today!