Alejandro C

Credit Locking: How Does It Work and Why Could It Be Useful for Us?

Credit locking is one of the many services financial companies offer nowadays in order to guarantee data security to their customers. In the aftermath of some infamous data breaches that put major credit companies on high alert, they began to offer credit locking as part of their credit package.

Credit Locking vs Credit Freeze

Credit locking is a general term used to describe two different ways of doing almost the same thing: a “credit lock” and a “credit freeze”. In deciding which is right for your credit situation, you should review the similarities and differences of each option. Generally, each credit security option focuses on protecting customers’ data and preventing fraudulent use of personal and financial information by preventing anyone, including credit companies, to access and share that information.

How Do They Actually Work and How Do They Protect People?

Both a credit lock and a credit freeze offer a similar outcome (i.e. they each prevent access to your credit), however, when you want to undo the protective action, it is easier and quicker to reverse a credit lock than a credit freeze.

By locking or freezing your credit report, you deny credit companies the possibility of sharing that information with other lenders. By doing so, you keep your credit information away from scammers and virtual thieves.

A credit lock can be lifted immediately, whereas a credit freeze can take a few days to be reversed. So, if you are in a hurry to recover access to your credit report, a credit lock might be a better option. On the other hand, if what you are looking for is increased security and a more difficult unlocking procedure, you might want to assess the possibility of freezing your credit information.

A credit freeze gives you the option to unfreeze access to our reports for a limited period of time or for a single individual/company. For example, if you are trying to get a mortgage you can authorize a specific bank to see our report while it remains invisible to other companies or lenders.

In looking at the different costs of these services, you might find that most credit companies charge a one-time fee for each credit unlocking while they charge customers a monthly fee, and usually no fee for unfreezing, if they opt for a credit freezing service. This makes sense because credit locking is usually related to preventive behavior (customers pay to feel safe in advance of whatever happens) whereas credit freezing is a reactive measure (after any suspicious activity, they then request the security measure).

In the long term, the costs associated with these services may become worth it because you could save money and time if you fall victim to the efforts of hackers and scammers. By using a credit lock or a credit freeze, the risk exposure for individuals and their families may be significantly reduced.