![]() ![]() Last year alone, the Federal Trade Commission (FTC), received close to 700,000 reports of fraud related to new fraudulent bank accounts, credit cards, and loans. One of the easiest ways scammers can target your finances is by using your stolen information to open new accounts or take out lines of credit and loans in your name. ![]() "These lock services may allow the credit reporting agency to market to consumers more aggressively for products that they may not need and/or shouldn't pay for," Tetreault says.What’s Better? A Credit Lock or a Credit Freeze? "What it does, consumers can usually do for free," Tetreault says.Īnother consideration: With a credit freeze, you won't be targeted by ads. However, Consumers Union doesn't recommend paying for credit monitoring. It costs $5 for your first month of access and $25 per month thereafter.Įxperian's credit lock product also includes daily credit monitoring and alerts you if someone tries to apply for credit while the report is locked, as well as access to your FICO Score 8 and Experian credit report. Not doing so is "like locking your front door but leaving your back door open," Wu says.Įxperian offers a subscription-based product called CreditLock through CreditWorks. But locking down only two of your three main credit reports isn't enough. Only two credit monitoring bureaus, TransUnion and Equifax, offer free credit-lock products. That gives you a grace period in case you hit an unexpected delay."Ī credit lock, on the other hand, is activated or lifted using an app on your smartphone, and it's instantaneous.Ĭonvenience can be costly. ![]() "For example, if you're planning on car shopping soon, I'd lift the freeze about three business days before applying for an auto loan. "The new law mandates that credit freezes can be lifted in less than 1 hour, but I recommend allowing a bit more lead time," says industry analyst Ted Rossman. "It's important to keep somewhere safe," Rossman says.Īnd it may take a bit of time before a request to lift a freeze goes into effect. And remember, you'll have to make the request with each of the credit bureaus. ![]() These PINs and passwords are important because you'll need them in case you want to temporarily lift your credit freeze in the future, for instance, if you want to apply for a new credit card. Equifax and TransUnion have you create a password if you manage your credit online, and will issue you a PIN if you manage your credit on the phone or by mail. An Equifax spokesperson now says the arbitration clause has been removed from TrustedID's terms and conditions.Ĭredit locks may be less complicated and less time-consuming to manage than credit freezes.Īll consumers requesting a freeze from Experian get a personal identification number to use to manage their credit information. But it also included an arbitration agreement requiring that any disputes be settled out of court, which would also prohibit consumers from participating in a class-action suit.įollowing consumer outrage, however, the company said it would no longer enforce the arbitration clause. "The contract may be unclear, may include provisions that allow the other party to change it, or include provisions that you may be better off not agreeing to, such as an arbitration agreement," she says.įor example, immediately following the breach, Equifax introduced its free TrustedID Premier product, which lets consumers lock their credit and provides credit monitoring. "Having a contractual agreement is not as strong as having protections under law," Tetreault says. By contrast, a credit lock is simply an agreement between you and the credit reporting agency. Perhaps the main reason a security freeze is the better option is that its promise to guard your credit accounts is guaranteed by law, Tetreault says. Here's a look at the key differences between a credit lock and credit freeze. A credit freeze offers more stringent legal protections, making it the better option for consumers, according to Christina Tetreault, a staff attorney on the financial services team at Consumers Union, the advocacy division of Consumer Reports. However, there are some important differences to keep in mind when deciding which tool to use. Equifax, for instance, offers a new product called "Lock & Alert" free for life. To entice consumers to use credit locks, the credit bureaus cite convenience and may offer special deals. They both prevent others from accessing your credit information, eliminating the possibility that a fraudster could open a new credit account in your name. However, each bureau is now offering credit lock tools, sometimes with hefty monthly costs, as alternatives to credit freezes.Ĭredit locks and freezes are similar. Consumers worried about identity theft after last year's massive Equifax data breach can finally freeze their credit reports at all three credit bureaus free of charge. ![]()
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