The difference between a credit block and a credit freeze

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Consumer fraud can be difficult to detect, but there are ways to protect yourself against identity theft. In addition to practicing good spending habits and being careful about sharing personal information, you could implement a credit hold or freeze. All three major credit bureaus — Equifax, Experian, and TransUnion — offer credit holds and freezes. Although both restrict access to your credit data, there are key differences between the two actions.

Credit freeze basics

A credit freeze, sometimes called a security freeze, is considered the most effective way to prevent others from opening new lines of credit in your name. When you initiate a credit freezethe credit bureau prevents the disclosure of your credit information to anyone (including lenders) without your consent until you unblock your credit file with a personal identification number.

Your credit score and existing credit accounts are not affected by a credit freeze. Your score won’t drop because you decided to protect your credit, and you won’t be penalized for freezing your credit when you have multiple lines of credit open and in use.

Credit freezes have been free since September 2018 under a federal law that prohibits credit reporting agencies from charging a fee for this service.

Credit Foreclosure Basics

Similar to a credit freeze, a credit lock prevents others from accessing your credit records. The only way to unlock your credit reports is to initiate it yourself. Best of all, it’s easier to unlock and lock your credit reports – there’s no PIN number and no waiting period.

The downside of a credit lock is the fees that come with it. Credit bureaus typically charge around $20 per month to keep your credit locked up and up to date. It is difficult to determine how much you will have to pay for a credit lock. Each bureau offers its own programs, and credit freezes are not part of federal law that protects individuals from credit freeze charges.

Can I still increase my credit score after freezing or locking it?

If you are considering opening a new line of credit, such as a car loan, a credit freeze or blockage does not affect your credit score. The main reason for putting a lock or freeze in place is to prevent identity theft – your score can always go up and down.

Although you can’t open additional lines of credit until you release or unlock them, you can work with the creditors you currently have and take steps to improve your credit score.

If you’re considering opening a credit card or applying for a car loan, make sure your credit lock or freeze is off. You can always lock or refreeze your credit once you’ve completed the application process.

Add a bad credit auto loan to your credit mix

Now that you know the difference between a credit lock and a credit freeze, are you considering adding a line of credit to boost your credit? If a car loan is on your mind, but you’re worried your credit is getting in the way, let us help.

AT Auto Express Credit, we’ve been helping borrowers with bad credit find financing for over 20 years by connecting them with local dealerships, and we want to help you too. To get started, all you have to do is fill out our quick and free form car loan application form. After that, we’ll immediately get to work connecting you with a dealer.

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