The Difference Between a Credit Freeze and a Credit Block (and When to Use Each)
In today’s world of rampant identity theft and data breaches, protecting your credit has become vital. The two main tools you can use to protect your information are a credit freeze and a credit freeze. While both restrict access to your credit file, there are some key differences to understand.
What is a credit freeze?
A credit freeze, also known as a security freeze, allows you to seal your credit reports with the three major credit bureaus— Equifax , Experian , and TransUnion . No one will be able to view your credit file or credit score until you temporarily lift or remove the freeze. This makes it extremely difficult for identity thieves to open new credit accounts in your name.
How does a credit freeze work?
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Freezes are regulated by federal law and can be installed, removed or removed by anyone at no cost.
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You must contact each credit bureau individually to freeze your report with that bureau.
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The frost remains in place forever unless you lift or remove it.
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You can temporarily lift the freeze when you need to apply for a new loan by providing a PIN.
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The freeze does not affect your credit score or existing access to lenders.
What is a credit lock?
A credit freeze is a credit monitoring tool offered by each credit bureau that allows you to quickly freeze and unfreeze access to your credit report. Like a freeze, freezes prevent creditors from viewing your report and opening new accounts. But there are some significant differences.
How do credit locks work?
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Locks are programs offered by credit bureaus and are not regulated by federal law.
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Locks may initially be free, but later use often requires a paid subscription.
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The process of locking and unlocking your report is faster than freezing.
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Locks can automatically re-lock after a certain period of time.
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Credit freezes do not have the same legal protections as freezes under some state laws.
When to Use Latching or Locking
So, in what situations are freezing or blocking most appropriate? Freezes provide the highest level of security and legal protection against identity theft and credit fraud. This is a great option for most consumers, especially those who don’t plan on opening new credit accounts frequently.
Credit locks can provide added convenience by allowing you to quickly lock and unlock reports. They may be suitable for those who need to apply for a new loan more often and who are willing to pay for the service. However, in some states, lockdowns do not have the same legal backing as freezes.
A better practice may be to freeze your credit reports and only release them when you plan to open a new line of credit. In cases where you need to repeatedly lock and unlock your device within a short period of time, a lock may make sense. But for maximum safety and legal protection, freezing is still recommended for most. What’s more, here’s how to unfreeze your credit instead of completely freezing or unfreezing it.