The Difference between Credit Security Freeze and Credit Lock Services

The easy access to compiled financial information, such as the information in credit bureau reports, brings benefits and dangers.  Although credit information bureaus make it easier for lenders to make decisions, they also make it easier for potential creditors to make credit decisions without really knowing who their customer is.  This can allow potential identity thieves the ability to open credit in a person’s name based only on the information contained in these credit bureau files.  But there are ways for consumers to put a limit on how their credit information is used, including credit security freezes and credit lock services offered by the credit bureaus.  The differences between a credit freeze and lock services are primarily in cost and ease of use.

Credit freezes are mandated by almost every state.  By ordering a freeze, a consumer tells the credit reporting agencies to prevent new creditors from accessing the information in the credit file for the purpose of extending new credit.  Existing creditors are still allowed to review the file for the purpose of reviewing their existing customers’ information.  And nothing in a credit freeze prevents a creditor from allowing a customer to use up whatever credit line is already approved.  For that matter, nothing in a credit freeze itself prevents a creditor from opening a new file, although most state laws do prevent that.

Credit freezes generally cost money.  In only a couple of states do the laws require that the bureaus give and lift freezes for free.  In almost every other state, the going rate is about $10 to freeze a file, and $10 to $15 to lift a freeze, even temporarily.  Although there are some states where the law does not require the bureaus to offer the service, as a matter of uniformity the agencies offer it in all states.

Credit freezes also are a bit more cumbersome to order and lift.  In most cases, an agency will require written proof of identity and residence to order the freeze, and then will often require written requests to lift the freeze.  State laws on the time that they have to comply with those requests vary.

Credit lock services are very similar to credit freezes, but are offered by the agencies on a payment basis and give more flexibility in imposing and lifting the lock, as well as the information the agency passes to the consumer.  Often the paid credit lock services allow online access to credit lock accounts to impose and lift the lock, or to manage who is allowed to see the information and for how long.  In exchange for a monthly or yearly fee, the services will usually allow unlimited (or more frequent) lock and thawing of the report, and will provide e-mail updates of what activity has occurred on the account.  In this way, the credit reporting agencies have taken the mandatory service required by state law and made it more user friendly – for a price.