A new law — the Economic Growth, Regulatory Relief, and Consumer Protection Act — takes effect on September 21, 2018. The law requires the big three credit bureaus to offer free fraud alerts and credit freezes. Equifax, Experian, and TransUnion will set up webpages for those services. You also have the ability to lock your credit. But if you’re concerned about credit fraud or identity theft, then freeze your credit, don’t lock it.
Freezing vs. Locking: What’s the difference?
According to Nerdwallet, it’s simpler to unlock a credit lock than it is to “thaw” a credit freeze. But credit freezing may afford legal protections that locking doesn’t.
A credit freeze restricts access to your credit file, making it harder for identity thieves to open new accounts in your name. You can freeze your credit as a preventative measure to avoid compromise of your credit file.
A credit lock likewise restricts access to your credit file, and you can unlock your credit report immediately at any time. But credit locks are not governed by the new law, and you must pay a monthly fee to the credit bureau for the ability to lock and unlock your file. Credit monitoring services like Lifelock are a waste of money.
Freeze your credit, don’t lock it
In September 2017, Equifax revealed that a data breach exposed the sensitive personal information of 143 million Americans. Unlike data breaches at Target or Yahoo, however, the Equifax breach compromised social security numbers and birth dates. This kind of breach can haunt consumers for years.
Starting September 21, credit freezing and unfreezing will be free services. Once you freeze your credit, no one (except the federal government) can access it, including you. You must go to all three credit bureaus separately and request the freeze. Locking your credit, on the other hand, is more expensive and offers fewer protections.
Unfreeze your credit when you need to
If you are applying for new credit or requesting a credit increase, you will need to unfreeze your credit. Likewise, if you freeze your credit and plan to get a mortgage, be ready to unfreeze your credit files at least twice during the process. Everyone should freeze their credit and only unfreeze it when you need access to it.