One of the most damaging things about identity theft is its impact on your credit. Until they’re detected, scammers can use your credit to get credit cards, take out loans and — in general — exploit your good name for all it’s worth. Eventually you’re usually able to repair the damage, but it can take years and will cost you a lot of stress (and money!) in the meantime.
One way to protect yourself against identity theft is by using a credit freeze or a credit lock. Both are effective, though the two aren’t identical and the differences are worth exploring. A bigger issue is that people often mistakenly believe that a lock or freeze is the only step they need to take in order to protect their identity. That’s a dangerous oversimplification, so your question shouldn’t be “credit freeze vs. lock,” but instead how you can make one or the other a part of your overall identity protection strategy.
Credit Freeze vs. Lock: The Same but Different
A credit freeze and a credit lock work in much the same way. In each case, you request that the three major credit reporting agencies refuse potential lenders or creditors access to your credit history. Since lenders won’t typically issue new credit without pulling a current credit report, that simple step makes it significantly harder for scammers to take advantage of stealing your identity.
While they both work in broadly the same way, there are differences between a credit freeze — which is defined and established by federal law — and a credit lock, which is a service provided by the credit reporting agencies themselves.
Using a Credit Freeze
Credit freezes were mandated by federal law beginning in September of 2018. To place a freeze, contact the three credit reporting agencies — Equifax, Experian and TransUnion — either online, by telephone, or by conventional mail. Online or telephone requests must be honored within an hour, while letters by mail must be processed within three days of the agency receiving your written request.
Once the freeze is in place, the risk of an identity thief having new credit issued in your name is low. If you yourself need a credit report for some reason, you can request to have it lifted or canceled. Again, online or telephone requests must be honored within an hour and written requests within three days. Placing and lifting a credit freeze are both free, by law. If you should have an issue with a reporting agency’s management of your request or the actual freeze, you can file a complaint with the FTC.
Using a Credit Lock
A credit lock is essentially the same as a credit freeze, except it’s offered directly by the credit reporting agency itself. Depending on the agency, it may be offered for free or for a monthly subscription, or you may be given the choice of a basic service for free versus a bundle of premium services for a fee.
If you view a credit reporting agency’s explanation of the service, it sounds pretty good: all the same benefits as a credit freeze, but you can lock and unlock it yourself instantaneously from an app or secure website. The reality is a bit more nuanced. For example, Consumer Reports points out that your rights under a lock are limited by your contract with the reporting agency, while the terms of a credit freeze are the law of the land.
Equifax provided an example of the difference in the wake of its 2017 data breach when it offered free credit monitoring to the millions of affected consumers…but the terms of the contract included an arbitration clause, preventing users from suing the company. The clause was dropped almost immediately, after fierce blowback from consumers and advocacy groups, but the point stands.
Should I Freeze My Credit?
Either a credit lock or a freeze will give you similar protection, then, if you’re willing to trade a measure of convenience for security. This brings us to the next obvious question, which is whether it’s a good idea for you.
It works best if you’ve already reached a point of stability in your life, with established credit and established business relationships. Remember, credit reports aren’t just for loans and credit cards: They’re also used to screen potential employees and tenants and to approve new accounts for cellular phones, cable bundles, utilities and more. If those things are still a regular part of your life, you may find that the inconvenience outweighs the benefits. Alternatively, you might find it practical to opt for a lock instead of a freeze, despite the weaker protections, on the basis of convenience.
Also, don’t focus purely on your own credit. Identity thieves will also happily steal your kids’ identities or your elderly parents’. If you have dependents or if you hold power of attorney for family members, discuss the merits of protecting them with a freeze as well.
Limits of Credit Freezes and Locks
It would be nice to think that a credit freeze or credit lock provided absolute protection against identity theft, but sadly that’s not the case. There are still several ways criminals could misuse your identity for gain. A lock or freeze won’t prevent companies from extending pre approved offers to you, for example, based on your prior credit. Scammers can use those to open new accounts, even when your credit is frozen. You can opt out of prescreened offers, but some offers don’t fit into that category and you might still receive them.
A bigger issue is that a credit freeze or lock won’t protect accounts that already exist. Someone who steals your identity can drain your savings and max out your lines of credit and credit cards pretty quickly, freeze or no freeze. It’s a powerful tool but no substitute for your own vigilance.
Finally, your credit report will still be accessible to some eyes even if locked or frozen. Your existing creditors will still be able to see it, for example, and so will debt collectors acting for them. Your credit information will also be available to government and law enforcement agencies, as long as they’ve taken proper steps to secure a court order, subpoena, search warrant or similar legal justification.
It’s Just One Tool in Your Toolbox
At the end of the day a credit freeze or a credit lock is a powerful tool, but just one of many that you have at your disposal. One alternative is to use a fraud alert, rather than a credit freeze or lock, to secure your credit. With a fraud alert potential creditors can still access your credit report, but the credit reporting agencies are obligated to verify your identity and the legitimacy of the request before they can release your information.
Your own actions and habits — not these institutional options — are your true first line of defense, so educating yourself about ways to prevent identity theft is always a good start. You should also familiarize yourself with some of the telltale signs that scammers are misusing your identity (and you’ll find lots of other useful, actionable advice if you search this blog for the “#Identity Theft” and “#Online Safety” hashtags).
Finally, Spokeo’s tools are at your disposal 24/7. Our simple, powerful people search tools can help you find out if the people you interact with are really who they say they are (because scammers are, well, scammers), and our dark web monitoring (that’s included for members with access to Spokeo Protect) will tell you if your personal information has been offered up for sale in that shady corner of the internet.
Identity theft is a definite threat that any thinking person should be concerned about, but you have the tools you need to live your life confidently in spite of it.
- U.S. Federal Trade Commission – Free Credit Freezes Are Here
- Experian Blog – What’s the Difference Between a Credit Freeze and a Credit Lock?
- Consumer Reports – Why a Free Credit Freeze Is Better Than a Credit Lock
- Parks Zeigler, LLC – Information About Equifax Data Breach
- U.S. Federal Trade Commission – Prescreened Credit and Insurance Offers
- U.S. Federal Trade Commission – Credit Freeze FAQs
- U.S. Federal Trade Commission – Fraud Alerts & Credit Freezes: What’s the Difference?