How to Choose Between Credit Freezes and Credit Locks

​Since the Equifax data breach last fall, Americans have become more familiar with credit freezes and fraud alerts than they ever wanted to be. Now, to add to the confusion, the three major credit bureaus are pushing yet another credit report security mechanism: credit locks. Like a credit freeze, a credit lock prevents anyone from accessing your credit report, which effectively prevents new loans or credit cards from being issued in your name. You can set a credit freeze or a credit lock, but you can’t have both in effect at the same time. Here’s why a credit freeze is a better choice for most people.

​Credit freezes and credit locks differ in three ways:

1. Cost: Credit freezes have to be set separately with each of the three credit bureaus, and the cost for each freeze is typically $10 or less. The cost of a credit lock depends on the bureau and the services bundled with the lock. Equifax and Transunion currently offer free credit lock products, whereas Experian charges for their credit lock product, which also includes identity theft insurance and alerts about changes in your credit report.
2. Convenience: The selling point for credit locks is that they make it easier to lock and unlock your credit report when you need to grant access to a bank or credit card company. Whereas a credit freeze requires a PIN number to unlock your credit report and there may be a fee to reinstate the freeze, the credit bureaus allow you to set and open a credit lock via a proprietary app.
3. Level of protection: Based on the cost and convenience, you might be thinking a credit lock is the best way to go. Not too fast, though. You don’t get the same level of protection with a credit lock that you get with a credit freeze. Credit freezes are mandated by state law, and if they fail, your rights are protected. Credit locks are a product dreamed up by the credit bureaus, and two of the three bureaus—Experian and Transunion—currently have arbitration clauses and class action waivers in their credit lock agreements. That means if the lock fails and the failure leads to identity theft, your only legal recourse is to go to an arbiter chosen by the credit bureau. Equifax doesn’t have these clauses, but any of the bureaus can change their terms of service at any time.

​If you can’t afford credit freeze fees or you need to open and re-lock your credit report frequently, a free credit lock is probably better than leaving your financial identity completely unprotected. But in general, security and consumer experts recommend using credit freezes rather than credit locks to protect your financial identity.