What Is the Difference Between Credit Freeze Vs Credit Lock?

Understanding the difference between a credit freeze and lock is essential to protect your credit report and prevent unauthorised access to your credit history. A credit freeze may block access to your credit history, making it harder for new credit accounts to be opened in your name. You need to contact each credit bureau individually to place or lift a credit freeze. Credit lock services let you lock and unlock your credit profile more easily, often online. Both options help monitor your credit history and control who can see your credit report, keeping your credit account safe.

What is a Credit Freeze?

A credit freeze blocks access to your credit report, preventing new credit accounts from being opened without your permission. Legally protected and free, it requires contacting each of the three major credit bureaus (TransUnion CIBIL, Experian, and Equifax) individually to place or lift a freeze. You can apply online, by phone, or by mail.

What is a Credit Lock?

A credit lock restricts access to your credit report, similar to a freeze, but is usually offered through credit lock services that include features like app control, alerts, and instant lock and unlock options. Unlike a credit freeze, credit locks may incur a fee depending on the credit bureau, while freezes are generally free. You can activate and deactivate it online or via an app anytime.

Difference between Credit Freeze Vs Credit Lock

Which is the better alternative - Credit Freeze or Credit Lock

The security mechanism of a credit lock is similar to that of a credit freeze, both of which limit access to your credit report. This ensures unauthorised access to your credit report is blocked. However, it also means that even legitimate access, such as for lenders checking your credit account for new credit applications, is restricted. When you choose a credit freeze or credit lock, lenders cannot view your credit report or credit score to determine eligibility for new credit accounts or loans.

The key difference is that a credit lock allows instant activation and deactivation, unlike a credit freeze, which can take time to activate or deactivate. For those who frequently apply for new loans or credit, credit lock services can be convenient, although they are typically paid services.

When to Use Credit Freeze vs Credit Lock

Protecting your credit profile starts with knowing when to use a credit freeze or credit lock, depending on your risk and access needs.

• Credit Freeze: Ideal if you suspect unauthorised access to your credit or your credit account in your name may be at risk. Prevents new credit accounts from being opened without your permission.
• Credit Lock: Best as a preventive measure to protect your credit and monitor activity. Offers instant activation and deactivation via credit lock services.
• Comparison with Fraud Alert: Unlike a fraud alert on your credit report, both a credit freeze and a credit lock block access entirely, rather than just notifying lenders.

Who Can Access Your Credit Report When It is Frozen or Locked?

Even when you freeze or lock your credit, certain parties can still access your credit report:

• Existing creditors for account management and ongoing transactions.
• Debt collectors handling your current credit account.
• Government agencies for legal or tax purposes.
• Companies reviewing pre-approved offers for new credit accounts may still access your report under specific conditions.

Remember, both a credit freeze and a credit lock block illegal access, helping protect your credit and prevent unauthorised access to your credit history.

How to Freeze and Unfreeze Your Credit Report?

Freezing or unfreezing is a key step to protect your credit report from fraud while maintaining access when needed.

How to Freeze Your Credit Report: Contact the three major credit bureaus, Equifax, Experian, and TransUnion CIBIL, online, by phone, or by mail to place a credit freeze. This prevents unauthorised access to your credit and stops new credit accounts from being opened in your name.

How to Unfreeze Your Credit Report: You can unfreeze your credit temporarily or permanently by submitting a request to the same bureaus. Lenders can then access your credit report for new credit applications or loans. Keep your PIN or password for quick activation and deactivation.

How to Lock and Unlock Your Credit Report

A credit lock helps protect your credit by restricting access to your credit report, similar to a credit freeze, but with more flexibility.

• Lock Your Credit: Use credit lock services provided by the credit bureaus or their apps to lock your credit report instantly. This prevents unauthorised access to your credit profile and protects your credit account.
• Unlock Your Credit: You can unlock your credit account anytime online or via the app, allowing lenders to view your credit report for new credit applications or loans.

Note: Keep your username and password handy for quick activation and deactivation.

Conclusion

Both a credit freeze and a credit lock help protect your credit and prevent unauthorised access to your credit. A credit freeze is a free, legal option best for suspected identity theft, while a credit lock offers instant activation and deactivation via credit lock services for ongoing monitoring. Choose based on your need for convenience and control when applying for a new credit card or loan.

For more guidance on safeguarding your credit account, visit the blog section on the Hero FinCorp website and read articles about monitoring your credit report and managing credit locks and credit freezes.

Frequently Asked Questions

Which option is better for my credit security? 

A credit freeze offers free, solid protection against identity theft, while a credit lock provides convenient, instant control for ongoing credit monitoring.

Will a credit freeze or lock affect my credit score? 

No, both tools block access without impacting your credit score or existing credit accounts.

How long does it take to freeze or lock my credit? 

A credit freeze takes up to 24 hours, while a credit lock ensures instant online activation and deactivation.

Is there any cost involved in freezing or locking credit? 

A credit freeze is free, while a credit lock is a paid service available through the credit bureaus.

What are the risks if I do not freeze or lock my credit? 

Your credit report may be accessed, allowing unauthorised new credit accounts and potentially harming your credit score.

How to lift a credit freeze or unlock for loan approval temporarily? 

Contact each bureau to lift a credit freeze or unlock your credit profile instantly online or via app.

Are credit locks available for all credit bureaus? 

Yes, the three major credit bureaus offer credit lock services, though features and fees may vary.