Identity theft continues to surge across the United States. In 2024, the Federal Trade Commission received over 1.1 million identity theft reports—a 9.5% increase from the previous year. With total fraud losses reaching $12.5 billion in 2024, representing a 25% jump from 2023, protecting your credit has never been more critical.
Credit card fraud remains the most common form of identity theft, accounting for nearly 44% of all reported cases. For our clients, identity theft can disrupt investment timelines, complicate loan applications for real estate or business ventures, and create months of remediation work.
Understanding the difference between credit freezes and credit locks is essential for making informed decisions about protecting your financial identity.
Credit Freeze: Your Strongest Defense
What It Is
A credit freeze (also called a security freeze) is a federally protected service that restricts access to your credit report. When your credit is frozen, most lenders cannot view your credit information, making it nearly impossible for identity thieves to open new accounts in your name.
Why We Recommend It
Completely Free: Thanks to federal legislation passed in 2018, credit freezes are free to place, lift, and remove at all three major credit bureaus (Equifax, Experian, and TransUnion).
Strong Legal Protection: Credit freezes are governed by federal law, providing robust consumer protections and legal recourse if something goes wrong.
Your Control: You receive a unique PIN that allows you to lift the freeze temporarily or permanently whenever you need legitimate credit access.
No Impact on Your Credit: Freezing your credit doesn’t affect your credit score, and you can still monitor your existing accounts and credit reports.
How It Works
When you place a freeze, you must contact each of the three major credit bureaus separately:
- TransUnion: https://service.transunion.com/
- Experian: https://www.experian.com/freeze/center.html
- Equifax: https://my.equifax.com
The process takes:
- Online or phone requests: Completed within one business day
- Mail requests: Completed within three business days
To apply for new credit, you simply lift the freeze temporarily using your PIN. Online freeze lifts are virtually instantaneous, while phone requests are completed within one hour.
Credit Lock: The Commercial Alternative
What It Is
Credit locks are commercial services offered by credit bureaus that function similarly to freezes but operate under private service agreements rather than federal law.
Current Landscape
Equifax Lock & Alert: Currently free but only protects your Equifax credit report
Experian CreditLock: Available only through a paid subscription at $24.99 per month, monitoring all three bureaus
TransUnion: Discontinuing credit lock services across multiple platforms in early 2025
Key Limitations
Cost: Most lock services require ongoing monthly fees, unlike federally mandated free freezes.
Limited Legal Protection: Credit locks operate under private service agreements with fewer consumer protections than federal freeze legislation.
Service Risk: As demonstrated by TransUnion’s recent discontinuation announcement, lock services can be modified or eliminated at the credit bureau’s discretion.
Incomplete Coverage: Some lock services only protect reports from a single credit bureau.
Side-by-Side Comparison
| Feature | Credit Freeze | Credit Lock |
| Cost | Always free by federal law | Often $0-$25/month |
| Legal Protection | Strong federal protections | Limited private contract terms |
| Speed to Lift | Instant online, 1 hour by phone | Typically instant via app |
| Coverage | Must place with each bureau | Varies by service |
| Permanence | Guaranteed by federal law | Subject to commercial changes |
| Best For | Maximum protection | Frequent credit applications |
Our Recommendation
For most clients, we recommend credit freezes due to their comprehensive protection, zero cost, and strong legal framework. Here’s why:
Superior Protection
Credit freezes provide the strongest available defense against new account fraud, backed by federal law that cannot be changed by commercial decisions.
Cost Effectiveness
The permanent free status of credit freezes eliminates ongoing subscription costs that can total $300 or more annually with premium lock services.
Reliability
Federal legislation guarantees credit freeze availability regardless of credit bureau business strategies or service discontinuations.
Implementation Strategy
For Most Situations
- Place freezes at all three bureaus: Equifax, Experian, and TransUnion
- Securely store your PINs: Keep freeze PINs in a secure location accessible when needed
- Plan ahead: Lift freezes before applying for credit, loans, or services requiring credit checks
- Refreeze after use: Restore protection once your legitimate credit application is complete
For Frequent Credit Users
If your business or investment activities require regular credit applications, consider:
- Establishing efficient freeze lift procedures
- Using one-year fraud alerts as an alternative (requires identity verification for new accounts but allows normal credit access)
- Consulting with your advisor about timing credit applications to minimize freeze management
Additional Considerations
Family Protection
Federal law allows parents to place free credit freezes for children under 16, providing early protection against identity theft that might otherwise go undetected for years.
Existing Accounts
Both freezes and locks only affect new account applications. Your existing credit cards, loans, and lines of credit continue to function normally.
Credit Monitoring
Neither freezes nor locks replace the value of regular credit monitoring. Continue reviewing your credit reports and account statements for unauthorized activity.
Taking Action
Given the current identity theft landscape and the superior protection offered by credit freezes, we encourage our clients to implement comprehensive credit freeze protection. The minimal inconvenience of managing freezes is far outweighed by the robust protection they provide.
If you have questions about implementing credit freezes or need assistance with timing around upcoming credit applications, please contact your advisor. We’re here to help you navigate these protection strategies while ensuring they align with your broader financial planning objectives.
Your financial security remains our priority, and proactive credit protection is an essential component of comprehensive wealth management in today’s environment.
Sources
¹ Federal Trade Commission, “New FTC Data Show a Big Jump in Reported Losses to Fraud to $12.5 Billion in 2024,” March 10, 2025
² Federal Trade Commission, “New FTC Data Show a Big Jump in Reported Losses to Fraud to $12.5 Billion in 2024,” March 10, 2025
³ Insurance Information Institute, “Facts + Statistics: Identity theft and cybercrime,” 2025
⁴ Federal Trade Commission, “Starting Today, New Federal Law Allows Consumers to Place Free Credit Freezes And Yearlong Fraud Alerts,” September 21, 2018
⁵ Federal Trade Commission, “Free credit freezes are here,” Consumer Advice, September 21, 2018
⁶ USA.gov, “How to place or lift a security freeze on your credit report”
⁷ Experian, “Credit Freeze and Credit Lock: What’s The Difference?” April 28, 2025
⁸ NerdWallet, “How to Freeze Your Credit At All 3 Bureaus for Free,” April 18, 2023
⁹ NerdWallet, “How to Freeze Your Credit At All 3 Bureaus for Free,” April 18, 2023
¹⁰ TransUnion, “Credit Freeze vs Lock: What’s the Difference?” 2025
¹¹ Federal Trade Commission, “Credit Freeze or Fraud Alert: What’s Right for Your Credit Report?” Consumer Advice, April 10, 2025
¹² Federal Trade Commission, “New protections available for minors under 16,” Consumer Advice, March 2019
Investment Advisory Services offered through HBK Sorce Advisory LLC, d.b.a. HBKS Wealth Advisors. Not FDIC Insured – Not Bank Guaranteed – May Lose Value, Including Loss of Principal – Not Insured By Any State or Federal Agency.
