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

Credit freezes are free by law, whereas credit locks typically have a monthly fee

Fact checked by Brendan HarknessFact checked by Brendan Harkness

A credit freeze and a credit lock can both block access to your credit reports so that scammers can’t open an account in your name. You may want to do this if you were a victim of identity theft or your information was stolen in a data breach. While the two terms are sometimes used interchangeably, there are important differences between a credit lock and a credit freeze.

For example, federal law requires credit freezes to be free at all three credit bureaus, whereas credit locks may be part of a paid service that offers additional identity theft protection services. Learn more about the difference between credit freezes and locks to protect your finances from fraud.

Key Takeaways

• Both credit freezes and credit locks prevent lenders from accessing your credit, which protects you from criminals trying to open credit in your name.
• Credit freezes are available for free at all three credit bureaus, while credit locks may be part of a paid subscription that offers additional identity theft monitoring services. 
• You must freeze or lock your credit with each of the three credit bureaus by making a request online, via mobile app, or over the phone. 
• If you don’t freeze or lock all of your credit reports, a scammer may use an open report to open an account.
• If you want to open a loan or credit card, you’ll have to remove the credit freeze or lock from your account. 

Credit Lock vs. Freeze: Key Differences

Both credit freezes and credit locks prevent companies from running a hard inquiry on your credit to approve you for a new account. The freeze or lock makes it impossible for criminals to open a new credit account in your name. 

Credit freezes are available for free at all three major credit bureaus (Equifax, Experian, and TransUnion) thanks to a 2018 federal law. 

Credit locks, on the other hand, are often part of a paid subscription service offered by credit bureaus, which typically includes identity theft monitoring and credit score updates and alerts. Credit locks may be activated and removed faster than credit freezes—these requests usually take effect instantly. Credit freeze timing is federally regulated, with timings shown in the table above.

Credit lock services are not always available for consumers under 18. However, parents or guardians can use a credit freeze to protect the credit reports of a federally defined “protected consumer,” such as children under age 16 or people who are not able to manage their own finances. After children turn 16, they can manage the freeze themselves. 

When you place a lock or freeze on your credit reports, it only blocks inquiries related to opening new credit accounts. Some entities can still access your reports, including:

• Yourself
• Companies that have an existing relationship with you (like your credit card issuers or a credit monitoring service you purchased)
• Insurance companies and potential employers, during the application process
• Collection agencies
• Government agencies

You must request freezes and locks at each credit bureau individually; you can’t freeze or lock all of them with a single request.

What Is a Credit Lock?

A credit lock restricts access to your credit reports, so no new credit accounts can be opened in your name. You may have to pay a monthly fee to lock your credit, which may provide access to other related services that vary by credit bureau. Here’s what credit locks cost at each of the three major credit bureaus:

• Experian: 7-day free trial, followed by $24.99 per month, for Experian CreditWorks Premium
• TransUnion: $29.95 per month through the TransUnion Credit Monitoring service 
• Equifax: Free

You’ll typically get a notification if any organization tries to make a hard inquiry on your credit reports for the purpose of opening a new account.

Along with the ability to lock your credit, the credit bureaus provide additional services with the packages mentioned above, such as fraud resolution support, credit fraud alerts, and identity theft insurance coverage. You can often manage your credit lock through a credit bureau’s website or mobile app.

What Is a Credit Freeze?

A credit freeze, also known as a security freeze, also blocks access to your credit report, but it’s free at every credit bureau thanks to federal law. You can call the credit bureaus to place freezes, but if you’d like to manage freezes online you’ll need to create an account with each credit bureau.

As with a credit lock, a credit freeze will prevent any new credit accounts from being opened in your name, whether the applications come from you or an identity thief. Unlike credit lock services, however, which are generally only open to adults 18 and older, credit freezes can be used by parents or guardians to freeze credit reports of minor children or other people who aren’t able to manage their own finances. 

If you want to open a credit card or take out a loan while your credit is frozen, you can remove (or thaw) the freeze indefinitely or just temporarily, for a period of time you specify. You may be able to schedule a thaw in advance to prepare for an upcoming credit application, as well.

Frequently Asked Questions (FAQs)

What Are the Downsides of Freezing or Locking Your Credit?

The main downside of freezing or locking your credit is that you won’t be able to open a new credit card or take out a loan until you thaw or unlock your credit with each credit bureau, which could delay the loan approval process. But you can schedule a thaw in advance, or temporarily unfreeze or unlock your credit reports while the application is in process.

Freezing or locking your credit also doesn’t 100% guarantee that you won’t be a victim of identity theft; for example, thieves may still be able to use stolen credit card numbers or access your bank account. Finally, locking your credit can come with monthly fees, depending on the credit bureau and service you choose. 

Will Locking or Freezing My Credit Card Affect My Credit Score?

Locking or freezing your credit card is different than locking or freezing your credit reports. A credit report freeze or lock prevents anyone from opening new credit accounts in your name. Locking your credit card means any transactions using the card, such as swiping or tapping it at a store, will be declined.

Locking or freezing your credit card won’t directly affect your credit score. In fact, it could protect you from credit score damage if your credit card was lost or stolen, since a thief wouldn’t be able to use it. In general, responsible credit card usage can improve your credit score, while racking up credit card debt and having a high credit utilization ratio can hurt it. 

Do I Need to Freeze My Credit With All Three Credit Bureaus?

Yes, if your goal is to protect yourself against unauthorized credit checks and accounts being opened in your name, you will need to freeze your credit with all three credit bureaus. 

Does a Credit Lock Prevent Soft Inquiries?

A credit lock will not prevent soft inquiries on your credit. A company may run a soft inquiry to see if you pre-qualify for a loan or credit card, a process that doesn’t impact your credit. 

Why Is My Credit Frozen if I Didn’t Freeze It?

If your credit is frozen even though you didn’t freeze it, this could be due to a system error or a mix-up with another consumer. It’s also possible that an unprompted credit freeze could be the result of identity theft, particularly if the thieves are trying to cover their tracks after opening an account in your name. A credit monitoring service may be helpful to keep a watchful eye on your credit reports and quickly catch any changes.

The Bottom Line

Whether your personal information was compromised in a data breach or you’ve detected fraud on your credit reports, freezing or locking your credit can protect you from having new accounts opened in your name.

A credit freeze may be your best option if you’re looking for a free service or a way to protect your child’s credit reports. A credit lock, on the other hand, may be preferable if you want additional identity theft and credit fraud monitoring services and you’re willing to pay for them. 

Either way, you’ll need to request a freeze or lock with all three credit bureaus individually. You’ll also have to remove the freeze or lock with all three credit bureaus if you want to open a credit card or apply for a loan. 

Freezing or locking your credit isn’t the only step you can take to prevent yourself from credit fraud. It’s also important to use strong passwords for your accounts, avoid checking financial accounts on public WiFi, and review your credit reports regularly for suspicious activity. 

Related: Phishing: What It Is and How to Protect Yourself

Read the original article on Investopedia.