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Military Finances 101: Should I Consider a Free Credit Lock? Thumbnail

Military Finances 101: Should I Consider a Free Credit Lock?

Managing Your Finances

Your credit rating can affect your ability to get and keep a security clearance. If someone steals your identity, they could mess up more than your credit rating. Credit bureaus such as Equifax, Experian, and TransUnion often offer credit locks as a security feature to help protect you from identity theft and fraud. You might want to consider one. To get you started, we'll explore what a credit lock is, how it differs from a credit freeze, and whether or not it's a good idea to accept a free credit lock offer.

What is a Credit Lock?

However, there are also some potential downsides to using a credit lock. One of the biggest concerns is that a credit lock applies only to the selected credit bureau. So, if you want to protect your credit fully, you’ll need to place a lock on all three main credit reports.

While the initial lock may be free, some credit bureaus may charge a fee to remove or temporarily lift the lock, depending on their terms and conditions. In addition, each bureau’s service agreements clarify that they don’t guarantee error-free operation or uninterrupted service.

Here's the scoop on what Canada's three main credit bureaus are currently charging for their credit lock services:

  • Equifax’s free credit lock product is called Lock & Alert, and the company says it will be free for life.1
  • TransUnion’s free product, administered under the company’s TrueIdentity brand, offers the lock/unlock option and other features, but they may charge a subscription fee to maintain the lock.2
  • Experian bundles its credit lock with other services, including identity theft insurance and alerts about when information changes on your report at all three bureaus.3 This service costs $24.99/month.

If you want to fully protect your credit, you will need to place a lock on all three main credit reports, and while the initial lock may be free, some credit bureaus may charge a fee to remove or temporarily lift the lock, depending on the terms and conditions. In addition, each bureau's service agreements clarify that they don't guarantee error-free operation or uninterrupted service.

Credit Locks vs. a Credit Freeze

A credit freeze is a similar security feature that restricts access to your credit report and can be a useful tool to protect your credit when you suspect or have been a victim of identity theft or fraud. Unlike a credit lock, a credit freeze applies to all three credit bureaus. If you place a credit freeze on your credit report, no one can access your credit information without your permission. Credit freezes are also governed by federal law, unlike credit locks.4

While a credit freeze may provide stronger protection than a credit lock, it also has some downsides. For example, temporarily lifting a credit freeze can be more difficult if you need to apply for credit or open a new account. In addition, some credit bureaus may charge a fee to place or remove a credit freeze.

Should I Accept a Free Credit Lock?

Whether or not you should accept a free credit lock offer depends on your individual needs and circumstances. A credit lock may be a good option if you're concerned about identity theft or fraud. It provides an extra layer of protection that can help prevent unauthorized access to your credit report.

However, a credit freeze may be a better option if you want to fully protect your credit. While lifting a credit freeze temporarily may be more inconvenient, it provides stronger protection than a credit lock.5

How to Protect Your Credit

In addition to credit locks and freezes, there are other things you can do to protect your credit:

  • Monitor your credit report regularly for any suspicious activity.
  • Sign up for fraud alerts, which will notify you if suspicious activity is detected on your credit report.
  • Use strong, unique passwords for all your financial accounts and change them regularly.
  • Regularly review your bank and credit card statements for any unauthorized transactions.
  • Be careful about sharing personal information online or over the phone, and only provide it to trusted sources.

A credit lock can be a useful tool in protecting your credit. However, it's essential to understand the differences between a credit lock and a credit freeze and the potential costs involved ("free" credit locks aren't always free). If you need help determining which option is best for you, talk to your financial advisor.

Military Finances are Different

Most civilians don't have to worry about their credit score affecting their ability to do their job (by losing a security clearance). That's not the only way your finances are different from a civilian. That's why we think you should work with a financial advisor that deals with your issues each and every day. If you'd like to find out how we work with clients like you, click the button below to schedule a free initial consultation.

If you found this article useful, you might like the following blog posts:

Military Finances 101: Identity Theft

Military Finances 101: Virtual Spending. Which Payment App Is Right For You?

Military Finances 101: A Guide to Identity Theft Insurance

  1. https://www.nerdwallet.com/article/finance/credit-lock-and-credit-freeze
  2. https://www.equifax.com/personal/products/credit/credit-lock-alert/
  3. https://www.transunion.com/product/trueidentity-free-identity-protection
  4. https://www.experian.com/consumer-products/creditlock.html
  5. https://consumer.ftc.gov/consumer-alerts/2018/09/free-credit-freezes-are-here

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