Credit freezes are now free – but do you need one?
We compared credit freezes versus locks and monitoring services: This is how to use them all to protect yourself
Making complex credit topics simple
A new law has changed the rules for credit freezes. Where once you had to pay a fee to freeze or unfreeze your credit, the Economic Growth, Regulatory Relief and Consumer Protection Act, established in reaction to the Equifax data breach, has put credit freeze fees on ice.
Since Sept. 21, 2018, it is free to freeze your credit in all 50 states.
“The removal of the fees makes the process more attractive to consumers who were hesitant to pay a fee for placing or lifting a freeze,” says Justin Lavelle, chief communications officer of online background check company BeenVerified.com.
And there’s good reason to consider a credit freeze.
“As consumers, we should assume that our personal data have already been compromised,” says Ted Rossman, CreditCards.com's industry analyst. “There have been so many high-profile data breaches – Equifax, Yahoo, Target, Home Depot, etc. – that chances are a fraudster somewhere has access to our sensitive info.”
A credit freeze isn’t the only way to protect your credit, however. Credit locks, credit monitoring, on/off switches and identity theft monitoring can also help.
However, a credit freeze has advantages those methods lack. Here’s how a credit freeze is different from other credit protection tools, and how you can combine them all to protect your credit.
See related: How to freeze your credit now that it's free
Credit freeze versus other credit protection tools
- Credit freezes and credit locks aren't the same thing.
- Freezing your credit versus credit monitoring services.
- Identity theft monitoring offers a different type of protection.
- On/off switches put you in control of your card, but fall short for fraud protection.
- How to streamline your credit protection efforts in three steps.
Credit freezes and credit locks aren’t the same thing
Equifax, Experian and TransUnion all offer credit locks, but don’t get them confused with credit freezes.
- A credit lock allows you to lock (or unlock) access to your credit report from your smartphone or an app instantly. While Equifax and TransUnion offer free credit locks, Experian charges a monthly fee for this service.
- A credit freeze is more secure and may require a PIN or password to freeze or unfreeze your credit report.
“Credit locks are entirely a creation of the credit bureaus and don’t offer the same protections under the law that a credit freeze does,” says Steve Weisman, identity theft expert and author of the Scamicide blog.
Credit locks block only certain third parties, such as potential creditors, from looking at your credit reports. A freeze takes that a step further by making credit reports inaccessible to lenders and others who might have an interest in viewing a consumer's credit history.
“A credit freeze will prevent someone who has your Social Security number and other personal information from being able to access your credit reports,” says Weisman.
Credit freezes also give you enhanced legal protections.
They don’t have arbitration clauses, says Lavelle, meaning that if your data were to be compromised, nothing would bar you from suing the credit bureau. On the other hand, some credit locks such as TransUnion’s TrueIdentity, come with forced arbitration, “meaning a customer’s dispute must be resolved by arbitration or via small claims court,” he says.
Convenience is also an argument in favor of credit locks over credit freezes, but freezing and unfreezing credit is easier than you might think.
“The new law mandating free credit freezes has eliminated the biggest barrier to entry,” says Rossman.
See related: Main lesson after Equifax breach: Protect yourself
Freezing your credit versus credit monitoring services
You may not have time to check your credit report regularly; that’s where credit monitoring services come in.
Credit monitoring services keep track of your credit report and notify you when new changes are reported, such as an opened or closed account.
Some credit monitoring services are free, including the one offered by Bankrate. Others charge a monthly fee.
Credit monitoring may also be included as one of your credit card benefits.
- Capital One’s free CreditWise monitoring service alerts you to changes reported to your TransUnion credit report.
- Bank of America credit card customers can sign up for Privacy Assist, but this monthly service will cost you $9.99.
- American Express cardmembers can enroll in CreditSecure credit monitoring, but again, there’s a fee; this one costs $16.99 per month.
The flaw with credit monitoring, says Weisman, is that, “at best, it only alerts you sooner to the fact that you’ve become a victim of identity theft.”
A credit freeze, on the other hand, actually protects you from someone opening new accounts in your name.
Identity theft monitoring offers a different type of protection
While credit monitoring focuses on your credit report, ID theft monitoring checks for misuse of your personal information.
It can be a free or paid service. All three credit bureaus offer some type of ID theft monitoring, either as a stand-alone product or as part of a packaged identity theft protection plan.
It’s also possible to get ID monitoring through your credit card company and even your home insurer.
- Discover introduced free Social Security and new account monitoring, which notifies you if your Social Security number is detected on risky websites or if new credit accounts are opened in your name.
- Mastercard offers ID theft alerts as part of its core group of benefits for Mastercard users.
Lavelle says identity theft monitoring is more comprehensive, since it monitors your financial and personal information beyond credit report activity.
- ID theft monitoring services can scan for your information across the internet, including the dark web.
- A credit freeze won’t prevent your information from being sold on the dark web if an identity thief has already stolen it. It also won’t stop someone who has your card number from making fraudulent purchases without your knowledge.
However, a credit freeze would prevent anyone who’s gotten a hold of your Social Security number from opening a new credit card, getting a car loan or applying for a mortgage in your name.
See related: Suspect card fraud? How to file a claim
On/off switches put you in control of your card, but fall short for fraud protection
On/off switches are an increasingly popular credit protection tool. Discover was one of the first card issuers to introduce them. They’ve since been by adopted by other card issuers, including Citi, Capital One, American Express and, more recently, Chase.
This feature, which allows you to turn your card on or off, can block someone from making new purchases or cash advances if your card is lost or stolen.
On/off switches can be effective in blocking misuse of your credit cards, but they don’t account for the larger fraud protection picture.
A single card may be protected against fraud, but without a credit freeze in place, the rest of your personal and financial information could be fair game for identity thieves.
“Freezing your credit report would make more sense if you were concerned about fraudulent activity involving your credit,” says Lavelle, since an on/off switch is only a temporary solution.
3 steps to streamline credit protection efforts
Protecting your credit and identity can seem overwhelming with the variety of tools available. The solution is developing a simple, yet thorough, plan for safeguarding your accounts and information.
Step 1: Use your credit card’s security features to your advantage.
If your credit card offers free credit monitoring, free credit score access, an on/off switch and/or ID theft monitoring, put those features to work.
These can help you detect suspicious activity on your credit cards or credit report, says Lavelle, so you can alert your credit card company and the authorities quickly.
Don’t rely solely on your card or another company’s free credit monitoring, however.
“Get in the habit of checking your credit report, including your credit score, at least once a year,” says Lavelle, to detect activity that you didn’t authorize or can’t confirm.
See related: How to read, understand a credit report
Step 2: Practice secure habits online.
Strong passwords and savvy email practices can keep you from inviting identity thieves in.
Avoid clicking on links or attachments in emails from unknown senders, which could contain viruses or malware. Don’t use the same passwords across multiple accounts and update them regularly. Remember to lock down your devices with unique passwords as well.
“Keeping your laptop, tablet or smartphone secure can protect your personal information from being compromised,” says Lavelle. “Ensure that all devices you use to access the internet have an anti-virus or security-related software feature.”
And, be cautious when using public Wi-Fi to access financial accounts away from home.
Step 3: Freeze your credit.
With credit freeze fees a thing of the past and the new law accelerating the freeze/unfreezing process, there’s really no excuse not to freeze your credit.
“For someone who still isn’t sold, it’s even more important if you’ve been notified that your data has been compromised or if you’re going through a big life change such as a divorce,” says Rossman.
A credit freeze may seem extreme compared to other security measures, but it outstrips them in effectiveness.
Remember, credit freezes aren’t just for adults either. Javelin Strategy reported more than 1 million cases of child identity theft in the U.S. in 2017. Child identity theft can go undetected until adulthood, creating problems when the now-grown victim is ready to begin using credit.
See related: How to check your child's credit report
“If you’re still not willing to freeze your credit, at least freeze your children’s credit,” says Rossman.
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