- Financial security is now a top concern for both individuals and businesses in today’s increasingly digital environment. Protecting one’s credit and financial identity has never been more important due to the omnipresent risk of identity theft and fraudulent activity. Credit freeze and credit lock are two well-liked strategies that consumers can utilise to protect their private credit information from potential dangers.
- A credit freeze and a credit lock both aim to prevent unauthorized access to personal credit information and thwart potential fraudsters from opening new accounts in a consumer’s name. However, these two security measures operate differently, and understanding their distinctions is vital for making informed decisions about personal credit protection.
In this article, we will delve into the difference between credit freezes and credit locks, their advantages and disadvantages, and when it may be appropriate to use each option.
What is Credit Freeze?
A credit freeze, also known as a security freeze, is a measure that restricts access to your credit report. When a credit freeze is in place, potential creditors and lenders are unable to access your credit report, making it difficult for identity thieves and fraudsters to open new accounts in your name. The freeze effectively locks down the credit report, preventing anyone from obtaining your credit history unless you temporarily lift or permanently remove the freeze.
Here is How You Do Credit Freeze
- Contact the four major credit bureaus (Equifax, TransUnion CIBIL, CRIF High Mark, and Experian) or visit their website to begin the process.
- Request a freeze from each of these bureaus. Reason being, freezing your credit with just one or two of them will not be effective as the fraudsters can still access your credit details from the others.
- Fill in the contact and other necessary information on their websites and you will be provided with a PIN.
- Once you enter the PIN, your credit report will be freezed by credit bureaus, which means that no one can access your credit history without your permission.
- If you have frozen your credit report but you want to apply for new credit, then you’ll need to unfreeze your credit first because the lenders will need the report for verification. So, unfreeze your credit report by contacting the credit bureaus or visiting their websites. It can take up to 24 hours to freeze your credit and less than one hour to unfreeze it.
What is a Credit Lock?
Just like credit freeze, a credit lock is also restrict access to your credit report. However, it’s a tool that’s offered by credit bureaus themselves. When you lock your credit, it prevents anyone from accessing your credit report without your permission. This includes credit card companies, lenders, and even yourself. You can unlock your credit report at any time, typically using a mobile app or website.
The main benefit of a credit lock is convenience. You can lock & unlock your credit report as required. Additionally, some credit bureaus offer additional security features, such as alerts when someone tries to access your credit report.
Here is How You Can Active Credit Lock
- Visit the website of credit bureaus and fill out the application form to set up a credit lock. It would be advisable to enable it on every bureau that offers this feature for better protection.
- Log in to your account on the credit bureau’s website or apps using your username and password.
- Enable and disable the credit lock in a few taps.
- Remember to remove the lock before applying for a loan. Otherwise, the lender will not be able to verify your credit report and they might even reject your loan application.
Key Differences Between Credit Freeze and Credit Lock
| Credit Freeze | Credit Lock |
| Is a free-to-use feature. | Credit bureaus can charge a monthly fee. |
| Freezing takes up to 24 hours and unfreezing takes less than one hour. | Locking and unlocking takes only a few seconds. |
| To freeze or unfreeze your credit, a request must be filed to credit bureaus. | Instant access to toggle on & off credit lock through mobile application. |
| Suitable for those who do not apply for loans and new credits often. | Suitable for those who apply for loans and credits regularly. |
| Use it if you are at risk of getting hacked or your sensitive information has been breached. | Use it to protect your credit report from being accessed without your permission and knowledge. |
How do Credit Freeze and Credit Lock Impact Credit Scores?
Both features protect you from fraudsters by locking your credit report. They do it without making any modifications to your credit report and do not affect your credit score in any way. No matter how many times you turn these features on and off or for how long you keep your credit locked or frozen, your credit score will not get affected in any manner.
Also Read – STD, LSS & DPD Meaning in CIBIL and Their Differences
Conclusion
In conclusion, both credit freezes and credit locks are effective tools to safeguard your credit information from potential identity theft and fraudulent activities. Understanding the differences between the two options will help you make an informed decision that aligns with your specific needs and preferences. Remember to research the laws and regulations in your region and carefully review the terms and conditions of any credit lock services before making your choice. Protecting your credit information is an essential step towards maintaining financial security and peace of mind.
Frequently Asked Questions
Why is there a freeze or lock on my credit report?
It is because you had previously decided to freeze or lock your credit report as a preventive measure. Perhaps you have forgotten about it as you could have done it a long time ago. This is not an issue at all. Unfreezing your credit report will take a maximum of one hour and unlocking just takes a few seconds.
Is it good to lock your credit file?
Yes, it is a good measure to lock your credit file. This will protect it from being affected by security breaches, unauthorized access, and other threats.
How long does a credit lock last?
There is no set period for how long a credit lock can last. You can enable it and disable it as per needed.
Is a credit freeze free?
Yes, a credit freeze is a free feature that you can use to safeguard your credit report from unauthorized access.
How do you remove a credit freeze?
You can remove a credit freeze by visiting the website of your credit bureau. You can contact the bureau by phone or by mail as well, but the quickest and most convenient way is to do it online.
