In researching how to respond to the huge Equifax hack and my deep dive into one of the possible responses – proactively placing a credit freeze – I couldn’t help but notice that there’s another new credit protection service option being pushed by the credit bureaus heavily these days: a credit lock. I hadn’t heard of a credit lock prior, and assumed that a “credit lock” was just an alternative name for a credit freeze. Sadly, there’s more to it than that (more confusion for consumers – yay!). So, I decided to dig in and learn everything I could about credit locks, so that I could share my findings with you.
What is a Credit Lock?
A credit lock is a relatively new credit protection service being offered by the three credit bureaus – Equifax, TransUnion, and Experian. The bureaus are marketing credit locks as a faster, more convenient alternative to credit freezes.
Similar to credit freezes, when you place a credit lock, you inform the credit bureau to not release your credit report to a party that requests it, without your express consent. Without access to your credit report, a credit lock will theoretically prevent companies from reviewing your credit history and then extending credit, loans, and services to someone using your identification. In effect, this prevents fraudulent new accounts being opened with your identification.
When you place a credit lock with a bureau, you’re only placing it with that one bureau. This means that in order to effectively prevent someone from using your identity to access credit, you should be placing a credit lock with all three bureaus (similar to credit freezes).
Also, similar to “lifting a freeze”, you can “unlock” your report with that bureau at any time, in the event that you legitimately need companies to be able to view your credit reports for whatever reason. As with locking, you’ll want to unlock with all three.
The similarities naturally beg the question, “What’s the difference between a credit lock and a credit freeze?”.
Credit Lock Vs Credit Freeze: What’s the Difference?
The most notable difference between a credit lock and credit freeze is that credit freezes are regulated and guaranteed by state law. If, for example, your credit report was improperly accessed during a freeze, you’d be protected from financial losses as the responsibility would fall on the credit bureau. Credit locks, on the other hand, are a direct contractual agreement between you and the individual credit bureau, and it’s unclear where the liability would fall. To get the service, you sign their unregulated agreement.
All three bureaus have some sort of arbitration and class action waivers, among other legalese, that you should be wary of (the same kind that earned Equifax a lot of blowback right after the hack). And it’s possible that by using credit lock services, you may boost the likelihood that you will be marketed to by 3rd parties.
Price is another factor here. TransUnion includes credit locks as part of their $24.95/mo. credit monitoring service, Equifax has free credit locks, and Experian is free for a week and $24.99/month after.
Meanwhile, starting in late 2018, free credit freezes (and thaws) are available to all Americans.
Here’s a chart that further breaks down the differences between a credit lock and credit freeze:
Credit Lock Versus Credit Freeze
|Credit Lock:||Credit Freeze:|
|What it is:||A credit lock informs the credit bureau to not release your credit report to a party that requests it, without your express consent. Without access to your credit report, a credit lock will theoretically prevent companies from reviewing your credit history & extending credit, loans, and services to someone using your identification. In effect, this prevents fraudulent new accounts being opened with your identification.||A credit freeze informs the credit bureau to not release your credit report to a party that requests it, without your express consent. Without access to your credit report, a credit freeze will theoretically prevent companies from reviewing your credit history & extending credit, loans, and services to someone using your identification. In effect, this prevents fraudulent new accounts being opened with your identification.|
|Where to get:|
|What it costs:||Free.|
Should you Use a Credit Lock?
After my research, I would not recommend using a credit lock. In addition to the murky consumer protections, legalities, and possible data re-selling for marketing purposes, TransUnion and Experian’s pricing are such that the financials or credit locks don’t make sense compared to credit freezes (keeping in mind that a freeze or lock with 1 bureau needs to be a freeze or lock with all 3). For the time being, I’m using neither lock nor freeze, and sticking to close reactive credit monitoring. If and when I’m targeted by identity thieves, I would opt for credit freezes over credit locks.
Thanks for doing all this research. That’s very helpful!
Thanks for helping me deal with the mess that the Equifax hack has put us all in!!!! Now I know what I need to do to protect myself and my family:-)
And by the way Equifax should not be allowed to continue doing business after they potentially have harmed so many hard working american!!!
I don’t see the point with all these different financial services, besides the inconvenience and fees.
The hackers already have our info to unlock our credit freeze/lock, so what’s the point? Either way we are screwed.
I decided a freeze was the surest safest method, since I don’t need any credit anytime soon. Annoying to pay for though. Also added fraud alert that should cover all three bureaus (Innovis needs separate action for alert or freeze). But recently read about another possible trip-up: supposedly signing up for credit monitoring after doing a freeze prevents monitor from accessing your credit! So have to monitor first then freeze. Trying to verify as I had just one source for this assertion.
Consumer credit fraud is a very expensive and painful way to learn you should protect yourself in this new world. Seems as though the credit bureaus could coordinate the administration of the “lock or freeze” so access would not be so cumbersome or expensive for for private protection. Feels like the thieves are in the new cyber world and we are not. A two step verification as an example.