credit locksIf you’re trying to protect your identity, you might be a little confused about the best way to secure your credit. The two primary ways you can prevent identity thieves from opening fraudulent accounts under your name, credit freezes and credit locks, sound similar and seem to do the same thing, so how are they different? Even though it’s easy to get them confused, credit freezes and credit locks have several subtle but important differences between them, and understanding those differences is key to figuring out which tool is the best choice for your needs. Read on to learn about the advantages and disadvantages of credit freezes and credit locks, and find out which one you should pick.

Credit freezes

A credit freeze restricts access to your credit, blocking creditors from viewing your credit reports at the three major credit bureaus. Since creditors usually need to see your credit reports before doing business with you, freezing your credit can make it difficult to get loans or apply for credit cards, but it also makes it much harder for identity thieves to use your personal information to open fraudulent accounts. One of the biggest features that defines credit freezes is that it is a protection provided by U.S. law, so if a company, bank or individual violates your credit freeze, you may have legal recourse. Legislation sets the price of credit freezes, which is currently free thanks to a recent federal law, and requires credit bureaus to implement your requests for credit freezes, temporary thaws or a freeze removals within one business day if you contact them by phone or online, and within three business days if you contact them by mail. There are some entities that can still view your credit reports even if you have a freeze in place, such as companies that provide you copies of your credit reports or scores upon your request (e.g., AnnualCreditReport.com), but that access is regulated.

The downside of credit freezes is that they aren’t really optimized for convenience. Since freeze and thaw requests can take one business day to go into effect, you will have to plan your requests ahead of time to make sure your credit reports are available when you need to apply for a credit card or loan. Also, when you freeze your credit at a credit bureau, you will receive a PIN or password that you’ll have to provide if you want to temporarily thaw your credit, reinstate the freeze or remove the freeze. If you lose that PIN or password, getting a replacement involves submitting documentation to the credit bureau in order to prove your identity, which is a hassle. These are small inconveniences on their own, but considering you have to deal with each of the three major credit bureaus individually, which means three thaw requests each time you want to apply for a loan and three PINs or passwords to keep track of, they add up quickly.

Credit locks

Credit locks effectively do the same thing as credit freezes, blocking creditors from accessing your credit reports so identity thieves have a more difficult time opening accounts in your name. Their big difference from credit freezes is that, instead of being a legal protection, credit locks are just a service that the credit bureaus provide. This gives the bureaus freedom to adjust credit locks as they see fit, whether it’s for the consumers’ benefit or their own. For example, signing up for a credit lock can involve accepting a terms of service agreement that waives your right to sue the credit bureau, requiring you to settle legal disputes with it through arbitration. Credit bureaus can also set their own prices for locks, and while Equifax and TransUnion offer credit locks for free, Experian bundles locks into its identity theft protection service Experian IdentityWorks, which has a monthly subscription fee.

However, the lack of regulation means that the credit bureaus are able to make their credit locks much more agile than credit freezes. You can turn credit locks on and off pretty much instantly, and all three major bureaus have mobile apps that let you lock or unlock your credit whenever you need to.

Which one should you use?

Credit freezes can take more time to put in place and remove, but the fact that they have legal backing makes them more reliable than credit locks. It’s also completely free to freeze your credit at all three bureaus, whereas locking your credit at all three bureaus means you would have to sign up for Experian IdentityWorks. For this reason, credit freezes are probably better for most consumers. If you have your credit checked fairly often and you want your credit protection to be as convenient as possible, though, credit locks may be a good option for you. This is especially true if you’re thinking about signing up for an identity theft protection service anyway, as Experian IdentityWorks is a quality service that provides credit score updates, $1 million of identity theft insurance and three-bureau credit monitoring in addition to credit locks.

Freezing or locking your credit is one of the simplest ways you can reduce your risk of identity theft, so there’s no reason not to go with the option that fits your life the best. For more ways to keep your identity safe from criminals, follow our identity theft protection blog.