Personal Finance

What You Should Know About Equifax’s New Credit Lock

Equifax recently introduced a new credit lock as part of its response to its massive data hack last year. Here's why you should skip it.

Equifax continues to make amends for that massive data breach last year that exposed the personal information of more than half the U.S. adult population. This week, it both extended free credit freezes on its reports until the end of June and introduced a credit lock at no cost.

Free enrollment in its credit-monitoring service, however, ended this week as previously scheduled.

With its new lock offering, Americans have one more option to safeguard their financial identities, given that much of the hacked information—names, birthdates and Social Security numbers—remains vulnerable to fraud in perpetuity. Here’s more about the tool, and whether it, or any other credit lock, is something you should consider using.

What is Equifax’s credit lock?

Called Lock & Alert, the new feature from Equifax allows you to lock or unlock your Equifax credit report via mobile app or online on a computer at no cost. Locking your report prevents new lenders from pulling your credit report, a necessary step in approving new credit and an easy way to thwart fraudsters.

You can unlock it by swiping on your app or clicking online when you apply for a loan. Your report will unlock instantaneously. The feature uses names and passwords to protect your information. Despite some reports of difficulty signing up for the lock, ValuePenguin found it easy to do, when using the tool it online. Credit expert John Ulzheimer also reported no problems.

Lock vs. freeze

Equifax joins TransUnion in offering a free credit lock. Experian provides a lock as part of an identity-theft service that costs $19.99 a month after 30 free days.

The bureaus maintain that locks have similar levels of protection as freezes, which also keep lenders from accessing your credit report. The main benefits for locks—at least the ones offered by Equifax and TransUnion—are cost and convenience.

Freezes and unfreezes cost between $3 and $12 per action per bureau—except in Indiana, Maine, North Carolina and South Carolina, where they’re free. Locks also can be undone in real time by smartphone, unlike a freeze, which can take longer to complete and requires a computer.

“The [credit lock] interface is much more 2018 and much more consumer-friendly,” says Ulzheimer, who switched from a freeze to Equifax’s lock for its ease-of-use. “I think we expect things to be that easy.”

Go with a freeze, for greater protection

Despite these factors favoring credit locks, and Ulzheimer’s endorsement, ValuePenguin still errs on the side of caution and recommends sticking with credit freezes. A key reason is the legal protection they provide. Credit freezes and how they are applied are mandated by state law, so a bureau must abide by these parameters. That means you’ll likely have more recourse if your state-regulated credit freeze doesn’t work.

Not so for a credit lock. The terms of use agreement that comes with the Equifax credit lock affirms this: The credit bureau can amend the agreement at any time. Additionally, terms don’t guarantee the lock’s performance or availability and shields the company from liability from damages.

“It’s a corporate policy not a legal requirement,” says Ruth Susswein, deputy director of national priorities at Consumer Action, a consumer advocacy group, “meaning it could change on a whim should the corporation reverse course or revise policy.”

Janna Herron

Janna is a Senior Writer at ValuePenguin covering banking, credit cards and credit scores. She has spent more than a decade writing and reporting on personal finance, real estate and business, and has received three journalism awards for her work.