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The Advantages and Disadvantages of Locking Your Credit


In today’s internet-driven world, finances are a mixed bag. Online banking services and tools make it easier to manage your money, but it’s also given thieves more ways to steal from unsuspecting victims. I personally have had my PayPal account hacked in the past, but fortunately, PayPal refunded the money that was illegally withdrawn.

Another common cyber crime is identity theft. Luckily, I haven’t dealt with this ordeal directly, but I recently had a close friend who did. It was an absolute nightmare trying to undo the damage that was done to her credit after accounts were opened in her name. That experience has left me much more conscious about my own risk. In my quest to learn how I can better protect my identity, I found out about a few surprising ways people can control their credit reports. I was already familiar with the credit freeze service, but I discovered a credit lock was also an option.

A credit lock is very similar, but not quite the same as freezing your credit. If you’re seriously concerned that your identity has been stolen you can request a security freeze. This will prevent creditors from accessing and looking at any of your credit reports unless you authorize it. That way thieves can’t use a person’s identity to open new lines of credit.

Each of the credit bureaus also allows consumers to use a credit lock. It’s not as draconian as a credit freeze, however, a credit lock comes with a few advantages of its own.

Advantages of a Credit Lock

A credit freeze offers identity theft protection, but lifting a freeze can be a real hassle. That’s where a credit lock has the advantage. With a credit lock, you have more control over the status and accessibility of your reports.

Better Manageability

Unlike a credit freeze, state laws don’t dictate a credit lock. You can initiate or end it at any time. If you initiate a credit freeze, your state may decide how long it remains in effect (usually several months). It’s a lot easier to lift a credit lock since you can do it yourself through your account. You can also lock and unlock your credit report as many times as you want throughout the year whether or not you’ve been a victim of identity theft.

Straightforward Fees

Depending on your state’s credit freeze laws, you may have to pay a fee to initiate a credit freeze, lift a credit freeze and/or receive a new PIN or code to access your accounts. The cost of a credit lock is very straightforward. The bureaus charge either a monthly fee or an annual fee that covers the service for the entire year. There’s no fee to end the credit lock or establish a new PIN.

You Can Still Get Credit

With a freeze, it can be difficult to establish new lines of credit since all three credit reports are simultaneously inaccessible unless you provide approval for a creditor with each credit reporting agency.

Preventative, Not Reactionary

A critical shortcoming of a credit freeze is that it’s reactionary. It may not be possible to initiate a freeze unless your identity has already been compromised. A credit lock is a preventative measure that can be used to limit access long before identity theft is a concern.

Disadvantages of a Credit Lock

The obvious disadvantage of a credit lock is its limited scope. In order to cover all three credit reports, you’ll need to set up a credit lock with each bureau. A credit lock through one credit bureau won’t impact the other two reporting agencies.

Another disadvantage alluded to above, is the cost. A credit lock isn’t ever going to be free. Typically, you’ll have to pay a monthly fee for the ability to lock and unlock your credit report. However, if your state charges fees for a credit freeze the cost is less of a factor.

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  • Reply spiffi |

    I put a credit lock on all 3 of the credit bureaus a few years ago – basically once I learned that I couldn’t put a credit freeze on until AFTER my identity had already been stolen -but I could put a lock on BEFORE it happened -sign me up!

    I had already bought and refinanced my house, and I had just bought a car – so I wasn’t in the market for any new lines of credit – so I did it!

    A couple of years later, I was applying for a line of credit (for emergencies!) on my house – and I ran into the credit lock – but all I had to do was find out which bureau the credit union was using, and generate a one time use pin for them to use. Easy, peasy and done.

  • Reply Kim B |

    I disagree with a credit freeze can only be used after identity had already been stolen, that is not my case. I have a freeze on all 3 of my credit bureaus for the past couple years without issue. In my state, it was $10 per bureau, and cost $10 to thaw with the pin provided at the time of the freeze. I am not looking for new credit, and only needed to thaw a single bureau once in the 2 years, so the cost has not been much. The process to thaw was fairly easy, using my mobile phone, i went to the credit bureau website, and added a temporary thaw. All my existing accounts before the freeze can still see my credit.

So, what do you think ?