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What is a credit lock?
A credit lock is a special type of hold on your credit report that blocks lenders from viewing it. Because lenders usually need to check your credit before they can approve your application for a loan or credit card, this protects your credit by preventing identity thieves from opening unauthorized accounts in your name.
However, credit locks only stop potential lenders from checking your credit (because that’s usually enough to prevent a fraudster from using your identity to get a loan).
The following people and groups can still view your report when you have a credit lock:
- You, to review your credit report
- Your existing creditors and debt collectors, to continue handling your accounts
- Your current or potential employer, to carry out background checks
- Landlords or property managers, to assess whether you’ll meet your obligations as a tenant
- Insurance companies, to determine how much to charge you for insurance policies
- Federal, state, or local government agencies and courts, to carry out court orders or warrants (or background checks if you’ve applied for a job with a security clearance)
- Child support agencies, to determine how much you should pay
- Cell phone providers and utility companies, to decide whether they’ll require you to pay a security deposit
- Credit card issuers, to see if you’re eligible for pre-approved cards (visit Opt Out’s website if you want to block these offers)
What is the difference between a credit lock and a credit freeze?
The difference between a credit lock and a credit freeze is that a credit freeze is a free service that is regulated by federal law, whereas a credit lock is a private service that sometimes costs money but is often quicker and more convenient to get than a credit freeze. Credit locks and freezes offer very similar protection in that both prevent creditors from viewing your credit report.
How to lock your credit report
Because you have a different credit report with each of the nationwide credit bureaus (Equifax, Experian, and TransUnion), you’ll have to lock them separately.
You can lock your credit on the bureaus’ websites or apps, but either way, you’ll need to follow these steps:
- Enroll in their credit locking programs
- Fill out your personal information, including your name, address, and Social Security number (SSN)
- Answer identity authentication questions (based on information in your credit report)
- Create a username and password for your account
How to lock your credit report at each bureau
Once you’re enrolled in the bureaus’ credit locking programs, you can lock your report instantly on your phone or computer.
Follow these steps to lock your credit at each of the three bureaus:
You can visit Equifax’s website to sign up for their Lock & Alert service. Alternatively, you can download their credit locking app on Google Play or the App Store. After Equifax suffered a major data breach in 2017, they scrapped their credit locking fees to encourage everyone to protect their credit reports. 1
You can lock your credit report on TransUnion’s website or on their mobile app, which you can get from the App Store or Google Play. TransUnion credit locks are free if you sign up for TrueIdentity, their identity protection service.
TrueIdentity’s extra perks include:
- Regular credit report refreshes (so you can see whenever a creditor updates your account)
- Security alerts whenever your account information is updated
- Up to $25,000 in identity theft insurance
Alternatively, you can pay $24.95 per month for TransUnion’s Credit Lock Plus service. This service provides up to $1 million in identity theft insurance and the ability to lock your credit with TransUnion and Equifax simultaneously.
TransUnion and Experian limit your right to sue over a data breach
As part of their service agreement, TransUnion includes a class-action waiver and arbitration agreement, and Experian includes a clause preventing you from suing them for losses related to a data breach.23 Equifax, however, has promised to never add an arbitration provision to their service agreement.4
The cheapest option is IdentityWorks Plus, which will cost you $9.99 per month. Alternatively, you can get the upgraded version, IdentityWorks Premium, for $19.99 per month. With a standard plan, you can monitor your Experian credit report and receive up to $500,000 of insurance against identity theft. With a premium account, you can monitor your credit across each of the three bureaus four times a year, and you’ll get up to $1 million in identity theft insurance.
How to unlock your credit
To unlock your credit, sign in to your account at each of the bureaus with the details that you originally used to register. Like before, you’ll need to unlock your accounts individually.
Should you lock your credit report?
Generally, you should lock your credit report between credit applications to protect yourself from identity theft. This way, your report will block inquiries you didn’t approve and fraudsters won’t be able to open credit accounts in your name.
Lock your credit immediately if you notice any of the following, which might indicate that an identity thief is using your credit:
- Someone accesses your personal information (like your SSN, driving license number, or email address)
- You get bills from collection agencies that you’ve never heard of
- You find inquiries or accounts on your credit report that you didn’t apply for
- Your data is stolen in a breach (every state has laws requiring creditors and the credit bureaus to notify you when this happens) 5
Be mindful that if you lock your credit, you won’t be able to apply for a loan because your prospective creditor won’t be able to assess your credit report. If you’re planning to open a new credit account soon, there are two ways you can protect your credit that won’t affect your applications:
Set up a fraud alert
Unlike a credit lock or credit freeze, a fraud alert allows prospective lenders to access your report. Fraud alerts appear as a warning on your credit report for prospective creditors to see; creditors will also need to verify that anyone applying for credit under your name is actually you.
Fraud alerts are free, and once you’ve spoken to one of the three bureaus, they’ll tell the other two bureaus to update your reports. Standard fraud alerts last for one year, and they can be renewed. They also entitle you to an additional free copy of your credit reports from each of the three main credit bureaus. 6
The drawback is that the extra steps your creditor or lender takes to verify your identity might not be sufficient, and a fraudster might get around them.
Set up an extended fraud alert
If you have proof (like a police report) that you’ve been a victim of identity theft, then you can put an extended fraud alert on your report, which lasts for seven years. Extended fraud alerts provide better protection than standard alerts because prospective creditors are required to contact you or meet you in person to verify your identity.6
Monitor your credit reports
Whether you monitor your credit through the bureaus or a separate company, you can regularly check your credit report for signs of suspicious activity (like new accounts appearing on your report that you didn’t authorize). You’ll get an alert whenever a new inquiry or credit account appears on your report.
Credit monitoring doesn’t restrict who can access your credit report, so fraudsters can still apply for credit in your name. However, if you’re monitoring your credit regularly, you’ll intercept unauthorized inquiries much sooner (and hopefully be able to put a lock on your credit before the fraudster opens a new account).