WHAT IS A CREDIT REPORT?
A credit report depicts the credit history of an individual which includes the number of credit accounts accessed, payment history, and information relating to credit limits. The credit information is often provided by the three bureaus – Equifax, TransUnion, and Experian.
These credit reports can be accessed by hackers and people may become victims whose personal data could be stolen. To prevent this everyone should know what Credit lock and credit freeze and the differences between them.
WHAT IS A CREDIT LOCK?
A credit lock is like a credit freeze which credit bureaus provide as a part of their service. The main purpose of credit lock includes locking the credit report and preventing illegal access to one’s data.
The main distinction between credit lock and freeze is how the lock is installed and removed. If one needs to get their credit freeze temporarily lifted, they must get in touch with each of the credit bureaus separately but in the case of a credit lock, it can be easily removed or set up through
mobile apps and online portals offered by the credit bureau.
Most lenders are unable to access the credit report when locked. When using a credit lock, notifications help to understand the changes in credit reports or about attempts to access them.
WHAT IS A CREDIT FREEZE?
An credit freeze also known as frozen credit is a security measure that credit bureaus follow which limits access to credit reports by outsiders. When a credit freeze is placed credit bureaus like TransUnion, Equifax, and Experian will not offer the reports to lenders without the individual’s consent. This prevents the creditor from accessing the credit history of others who wish to open a new credit account with an already existing name.
At times consumers who believe that their credentials have been stolen prefer a credit freeze. Until the credit freeze is lifted financial institutions, banks and lenders don’t have access to the user’s credit card information.
DIFFERENCES BETWEEN CREDIT FREEZE AND CREDIT LOCK :
| S.No | Credit Freeze | Credit Lock | |
| 1. | Charges | Free of cost | Transunion: A certain amount is paid for the monitoring services. Experian: Free for the first seven days followed by paying a certain amount for the services included. Equifax: Free of cost |
| 2. | Security | Federal law-based and pin-protected provided by the credit bureaus. | Protected with a user ID and password. |
| 3. | Period required | The credit bureau will initiate the credit freeze within 24 hours after receiving the registration by phone or online. A pin is required to unlock the deactivation process which takes an hour. | Deactivation is done instantly by using a reliable app or website. |
| 4. | Lasting period | Till it defrosts. | As long as the service is utilized by the individual. |
| 5. | Application process | Complex – Send an email or call the credit bureau to activate a PIN that can be used later to freeze and unfreeze the credit report. | Simple- A username and password are required to log in to the credit bureau app or website to activate and deactivate the credit lock. |
| 6. | Reasons to activate | The credit freeze is activated when individuals fear their data being exposed. | It is activated as a security measure to protect the credit report and personal data. |
WHEN TO USE A CREDIT FREEZE :
When choosing long-term security over applying for a new credit, a credit freeze helps to safeguard an individual’s credit report and personal information. When a person applies for a new credit, the credit freeze also alerts them to temporarily lift their freeze.
Credit Freeze acts as a tool to protect the credit report of an individual. People often opt for a credit freeze when they think that their information is stolen or if they have been a victim of identity theft. Credit bureaus are required by federal law to provide free credit freeze and unfreeze services.
With the help of a password-protected online account, the individual can update or verify their credit report with the agencies and have the information verified. It is important to freeze the credit report at all three agencies to safeguard the data completely.
WHEN TO USE A CREDIT LOCK :
A credit lock can be used to safeguard the information in advance to prevent being hacked. Here the locks are not governed by federal legislation in contrast to freeze. A credit lock works best when it is established with all the bureaus.
A single registration on the website of each agency is enough to lock and unlock the credit report.
HOW TO FREEZE YOUR CREDIT :
To freeze the credit one must contact all three major bureaus. Requesting by phone or online separately is the only way to stop anyone from opening new credit accounts. It is a free, simple, and quick process. The below mentioned are the contact numbers for all three bureaus to reach them.
- Equifax: 888-298-0045
- TransUnion: 888-909-8872
- Experian: 888-397-3742
The three credit bureaus do the same job following the same guidelines and laws but don’t work together. Later it becomes easy to unfreeze the credit online.
HOW TO UNFREEZE YOUR CREDIT :
The simplest and easiest way to unfreeze the credit is by visiting the website of each of the credit bureaus and logging in with details to make a request. A request call or letter will help to unfreeze the credit. This process becomes easy and convenient online.
HOW TO LOCK YOUR CREDIT :
The credit can be locked by registering with one of the three bureaus. The service can be used when creating a special login to access the credit. Credit locks are easier when compared to freeze because they can be done through apps or websites.
HOW TO UNLOCK YOUR CREDIT :
These credit locks can be unlocked when directly logging through the app. The unlock for credit remains for a short period to do the specific purpose.
Also Read:
Why you should not exceed your credit limit
FAQ:
Is it a good idea to put a freeze on your credit?
Yes, Freezing your credit serves to protect your report against any theft or fraud. However, applying for a new credit or insurance requires you to unfreeze your credit.
Does a credit freeze lower your credit score?
No, Your credit score is unaffected by credit freezing. Still, for lenders to view your credit report, you must first unfreeze your credit if you wish to open a new line of credit.
How do I put a freeze on all three credit bureaus?
To post a request to freeze your credit to the credit bureau, the following details could help
Equifax: 1-800-349-9660
Experian: 1-888-397-3742
TransUnion: 1-800-680-7289
What does a credit freeze do?
A credit freeze blocks any new credit inquiries unless they originate from a government agency or an existing creditor.
Which is a secured option credit lock/ credit freeze?
A credit freeze is considered the best and most secure option compared to a credit lock. Because the credit freeze option is governed by federal law. Conversely, a credit lock only constitutes an agreement between you and your credit reporting agency.
