Credit freezes are free by law, whereas credit locks typically have a monthly fee
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Fact checked by Brendan HarknessFact checked by Brendan Harkness
A credit freeze and a credit lock can both block access to your credit reports so that scammers can’t open an account in your name. You may want to do this if you were a victim of identity theft or your information was stolen in a data breach. While the two terms are sometimes used interchangeably, there are important differences between a credit lock and a credit freeze.
For example, federal law requires credit freezes to be free at all three credit bureaus, whereas credit locks may be part of a paid service that offers additional identity theft protection services. Learn more about the difference between credit freezes and locks to protect your finances from fraud.
Key Takeaways
Both credit freezes and credit locks prevent lenders from accessing your credit, which protects you from criminals trying to open credit in your name.Credit freezes are available for free at all three credit bureaus, while credit locks may be part of a paid subscription that offers additional identity theft monitoring services. You must freeze or lock your credit with each of the three credit bureaus by making a request online, via mobile app, or over the phone. If you don’t freeze or lock all of your credit reports, a scammer may use an open report to open an account.If you want to open a loan or credit card, you’ll have to remove the credit freeze or lock from your account.
Credit Lock vs. Freeze: Key Differences
Credit Freeze
Credit Lock
Cost
Free
Usually bundled with other services for a monthly fee, though credit locks are free at Equifax
Time to go into effect
Within one business day when requested online or by phone; within three business days when requested by mail
Usually instant
How long it lasts
Until you remove the freeze
Until you remove the lock or stop using the service
How long it takes to remove it
Within one hour when requested online or by phone; within three business days when requested by mail
Usually instant
Governed by federal law
Yes
No
Both credit freezes and credit locks prevent companies from running a hard inquiry on your credit to approve you for a new account. The freeze or lock makes it impossible for criminals to open a new credit account in your name.
Credit freezes are available for free at all three major credit bureaus (Equifax, Experian, and TransUnion) thanks to a 2018 federal law.
Credit locks, on the other hand, are often part of a paid subscription service offered by credit bureaus, which typically includes identity theft monitoring and credit score updates and alerts. Credit locks may be activated and removed faster than credit freezes—these requests usually take effect instantly. Credit freeze timing is federally regulated, with timings shown in the table above.
Credit lock services are not always available for consumers under 18. However, parents or guardians can use a credit freeze to protect the credit reports of a federally defined “protected consumer,” such as children under age 16 or people who are not able to manage their own finances. After children turn 16, they can manage the freeze themselves.
When you place a lock or freeze on your credit reports, it only blocks inquiries related to opening new credit accounts. Some entities can still access your reports, including:
YourselfCompanies that have an existing relationship with you (like your credit card issuers or a credit monitoring service you purchased)Insurance companies and potential employers, during the application processCollection agenciesGovernment agencies
You must request freezes and locks at each credit bureau individually; you can’t freeze or lock all of them with a single request.
What Is a Credit Lock?
A credit lock restricts access to your credit reports, so no new credit accounts can be opened in your name. You may have to pay a monthly fee to lock your credit, which may provide access to other related services that vary by credit bureau. Here’s what credit locks cost at each of the three major credit bureaus:
Experian: 7-day free trial, followed by $24.99 per month, for Experian CreditWorks PremiumTransUnion: $29.95 per month through the TransUnion Credit Monitoring service Equifax: Free
You’ll typically get a notification if any organization tries to make a hard inquiry on your credit reports for the purpose of opening a new account.
Along with the ability to lock your credit, the credit bureaus provide additional services with the packages mentioned above, such as fraud resolution support, credit fraud alerts, and identity theft insurance coverage. You can often manage your credit lock through a credit bureau’s website or mobile app.
What Is a Credit Freeze?
A credit freeze, also known as a security freeze, also blocks access to your credit report, but it’s free at every credit bureau thanks to federal law. You can call the credit bureaus to place freezes, but if you’d like to manage freezes online you’ll need to create an account with each credit bureau.
As with a credit lock, a credit freeze will prevent any new credit accounts from being opened in your name, whether the applications come from you or an identity thief. Unlike credit lock services, however, which are generally only open to adults 18 and older, credit freezes can be used by parents or guardians to freeze credit reports of minor children or other people who aren’t able to manage their own finances.
If you want to open a credit card or take out a loan while your credit is frozen, you can remove (or thaw) the freeze indefinitely or just temporarily, for a period of time you specify. You may be able to schedule a thaw in advance to prepare for an upcoming credit application, as well.
Experian
Equifax
TransUnion
Online
Equifax Consumer Services Center
Phone
(888)-EXPERIAN ((888) 397-3742)
(888) 298-0045
(800) 916-8800
Experian Security Freeze
P.O. Box 9554
Allen, TX 75013
Equifax Information Services LLC
P.O. Box 105788
Atlanta, GA 30348-5788
TransUnion
P.O. Box 160
Woodlyn, PA 19094
Frequently Asked Questions (FAQs)
What Are the Downsides of Freezing or Locking Your Credit?
The main downside of freezing or locking your credit is that you won’t be able to open a new credit card or take out a loan until you thaw or unlock your credit with each credit bureau, which could delay the loan approval process. But you can schedule a thaw in advance, or temporarily unfreeze or unlock your credit reports while the application is in process.
Freezing or locking your credit also doesn’t 100% guarantee that you won’t be a victim of identity theft; for example, thieves may still be able to use stolen credit card numbers or access your bank account. Finally, locking your credit can come with monthly fees, depending on the credit bureau and service you choose.
Will Locking or Freezing My Credit Card Affect My Credit Score?
Locking or freezing your credit card is different than locking or freezing your credit reports. A credit report freeze or lock prevents anyone from opening new credit accounts in your name. Locking your credit card means any transactions using the card, such as swiping or tapping it at a store, will be declined.
Locking or freezing your credit card won’t directly affect your credit score. In fact, it could protect you from credit score damage if your credit card was lost or stolen, since a thief wouldn’t be able to use it. In general, responsible credit card usage can improve your credit score, while racking up credit card debt and having a high credit utilization ratio can hurt it.
Do I Need to Freeze My Credit With All Three Credit Bureaus?
Yes, if your goal is to protect yourself against unauthorized credit checks and accounts being opened in your name, you will need to freeze your credit with all three credit bureaus.
Does a Credit Lock Prevent Soft Inquiries?
A credit lock will not prevent soft inquiries on your credit. A company may run a soft inquiry to see if you pre-qualify for a loan or credit card, a process that doesn’t impact your credit.
Why Is My Credit Frozen if I Didn’t Freeze It?
If your credit is frozen even though you didn’t freeze it, this could be due to a system error or a mix-up with another consumer. It’s also possible that an unprompted credit freeze could be the result of identity theft, particularly if the thieves are trying to cover their tracks after opening an account in your name. A credit monitoring service may be helpful to keep a watchful eye on your credit reports and quickly catch any changes.
The Bottom Line
Whether your personal information was compromised in a data breach or you’ve detected fraud on your credit reports, freezing or locking your credit can protect you from having new accounts opened in your name.
A credit freeze may be your best option if you’re looking for a free service or a way to protect your child’s credit reports. A credit lock, on the other hand, may be preferable if you want additional identity theft and credit fraud monitoring services and you’re willing to pay for them.
Either way, you’ll need to request a freeze or lock with all three credit bureaus individually. You’ll also have to remove the freeze or lock with all three credit bureaus if you want to open a credit card or apply for a loan.
Freezing or locking your credit isn’t the only step you can take to prevent yourself from credit fraud. It’s also important to use strong passwords for your accounts, avoid checking financial accounts on public WiFi, and review your credit reports regularly for suspicious activity.
Related: Phishing: What It Is and How to Protect Yourself
Read the original article on Investopedia.
Credit freezes are free by law, whereas credit locks typically have a monthly fee
Amazon.com: Its Role in the U.S. Industry
Introduction
Amazon.com, often simply referred to as Amazon, has transformed from an online bookstore into a colossal global conglomerate that has fundamentally altered the landscape of retail, technology, and numerous other industries. Founded in 1994 by Jeff Bezos, Amazon’s rapid growth and diversification have made it a central player in the U.S. economy. Its impact is felt across various sectors, including e-commerce, logistics, cloud computing, entertainment, and even artificial intelligence. This article explores Amazon’s role in the U.S. industry, examining its influence, achievements, and the challenges it faces.
The Rise of Amazon.com
Origins and Early Growth
Amazon began as an online bookstore in Bezos’s garage in Bellevue, Washington. The vision was simple but revolutionary: to create an online platform where people could buy books. Bezos recognized the potential of the internet to disrupt traditional retail and chose books as his starting point due to their wide appeal and ease of distribution. By offering a vast selection and competitive prices, Amazon quickly gained a foothold in the market.
The company’s initial public offering (IPO) in 1997 marked the beginning of its journey toward becoming a dominant player in the U.S. and global markets. Amazon’s early success was driven by its focus on customer satisfaction, an extensive inventory, and a commitment to fast and reliable delivery. This focus laid the foundation for its expansion into other product categories and services.
Diversification and Expansion
Amazon’s diversification strategy began with the introduction of new product categories, such as electronics, toys, and apparel. This move positioned Amazon as a one-stop shop for consumers, significantly expanding its customer base. The company also introduced its marketplace platform, allowing third-party sellers to offer their products alongside Amazon’s own inventory. This not only increased the variety of products available but also created a new revenue stream for the company through commissions on sales.
One of the most significant milestones in Amazon’s diversification was the launch of Amazon Web Services (AWS) in 2006. AWS provided cloud computing services to businesses, enabling them to rent computing power and storage rather than investing in expensive infrastructure. This service quickly became a cornerstone of Amazon’s business, contributing significantly to its profitability and establishing Amazon as a leader in the tech industry.
Amazon’s Role in E-Commerce
Transforming Retail
Amazon’s impact on the retail industry cannot be overstated. It has revolutionized the way consumers shop, shifting much of retail activity from brick-and-mortar stores to online platforms. The convenience of shopping from home, coupled with Amazon’s vast selection and competitive pricing, has led to a fundamental change in consumer behavior. This shift has forced traditional retailers to adapt, leading to the rise of omnichannel strategies that integrate online and offline sales.
The concept of “one-click shopping,” patented by Amazon in 1999, further streamlined the online shopping experience. This innovation reduced the friction in the purchasing process, contributing to higher conversion rates and reinforcing Amazon’s dominance in e-commerce. Additionally, Amazon Prime, launched in 2005, offered customers free two-day shipping and other benefits for an annual fee, further solidifying customer loyalty and increasing the frequency of purchases.
Impact on Small Businesses
While Amazon has provided opportunities for small businesses through its marketplace platform, it has also posed challenges. On the one hand, small businesses gain access to a vast customer base and the logistics infrastructure that Amazon offers. On the other hand, they face intense competition, not only from other third-party sellers but also from Amazon itself. The company’s ability to undercut prices and its control over the marketplace platform have led to concerns about fairness and market power.
Moreover, Amazon’s algorithms and data-driven approach to retail have raised questions about the transparency of how products are promoted and priced on the platform. Small businesses often struggle to achieve visibility without spending on Amazon’s advertising services, which can be costly. Despite these challenges, many small businesses continue to rely on Amazon as a vital sales channel, underscoring its central role in the U.S. retail industry.
Amazon in the Logistics and Supply Chain Industry
Revolutionizing Logistics
Amazon’s impact extends beyond retail into logistics and supply chain management. To fulfill its promise of fast and reliable delivery, Amazon has invested heavily in building a sophisticated logistics network. This network includes a vast network of fulfillment centers, advanced robotics, and a growing fleet of delivery vehicles, including drones.
Amazon’s logistics capabilities have set new standards for the industry. The company has pushed the boundaries of what is possible in terms of speed and efficiency, challenging traditional logistics providers like FedEx and UPS. Amazon’s commitment to customer satisfaction has driven innovations such as same-day and even one-hour delivery in select areas, further raising consumer expectations.
In-House Logistics Services
In recent years, Amazon has taken steps to reduce its reliance on third-party logistics providers by expanding its in-house delivery capabilities. The launch of Amazon Logistics, a service that uses independent contractors to deliver packages, is a testament to this strategy. This move has enabled Amazon to exert greater control over the delivery process and reduce costs.
However, this expansion has not been without controversy. Amazon’s use of independent contractors has sparked debates about labor practices and the gig economy. Critics argue that Amazon’s business model places financial and physical burdens on its delivery drivers, who are often classified as independent contractors rather than employees. This classification exempts Amazon from providing benefits and protections typically afforded to employees, such as health insurance and minimum wage guarantees.
Amazon Web Services: The Backbone of the Internet
Dominating Cloud Computing
Amazon Web Services (AWS) has emerged as one of the most significant contributors to Amazon’s success. As the leading provider of cloud computing services, AWS powers a vast portion of the internet, supporting everything from startups to large enterprises. Its services include computing power, storage, databases, machine learning, and more.
AWS’s dominance in cloud computing has had a profound impact on the tech industry. By providing scalable and cost-effective solutions, AWS has lowered the barriers to entry for new businesses, fostering innovation and entrepreneurship. Companies no longer need to invest heavily in physical infrastructure; instead, they can rent the necessary resources on demand from AWS.
Economic Impact and Innovation
The success of AWS has not only boosted Amazon’s financial performance but also contributed to the broader U.S. economy. AWS has created jobs, driven innovation, and supported the growth of numerous tech companies. Its services have become integral to the operations of many businesses, from streaming services like Netflix to financial institutions and government agencies.
AWS’s role in advancing technologies such as artificial intelligence and machine learning has also been significant. By making these technologies accessible through cloud services, AWS has enabled companies to develop new applications and services that were previously out of reach. This has spurred growth in sectors such as healthcare, finance, and entertainment.
Amazon’s Influence on Entertainment and Media
Amazon Studios and Prime Video
Amazon’s foray into the entertainment industry began with the launch of Amazon Studios and Prime Video. These platforms have become key players in the streaming wars, competing with giants like Netflix, Disney+, and HBO Max. Amazon Studios produces original content, including critically acclaimed series like The Marvelous Mrs. Maisel and The Boys, as well as feature films.
Prime Video, available as part of the Amazon Prime membership, has become a major driver of subscriber growth. By offering a mix of original content and licensed programming, Amazon has been able to attract a diverse audience. The company’s investment in high-quality content has not only boosted its streaming service but also positioned it as a significant player in Hollywood.
Impact on the Publishing Industry
Amazon’s origins as an online bookstore continue to influence the publishing industry. The company has become the largest bookseller in the world, both in physical books and e-books. The Kindle, Amazon’s e-reader, revolutionized the way people consume books, making digital reading mainstream.
However, Amazon’s dominance in the book market has raised concerns among publishers and authors. The company’s pricing strategies and negotiation tactics have led to disputes over revenue sharing and control. Amazon’s influence over the publishing industry extends to self-publishing, where its Kindle Direct Publishing platform allows authors to bypass traditional publishers and reach readers directly. While this has democratized publishing, it has also led to an oversaturation of the market and challenges in quality control.
Challenges and Criticisms
Regulatory Scrutiny
Amazon’s immense size and influence have made it a target for regulatory scrutiny. In the U.S. and abroad, lawmakers and regulators have raised concerns about the company’s market power, labor practices, and treatment of third-party sellers. Antitrust investigations have been launched to determine whether Amazon engages in anti-competitive behavior, such as favoring its own products over those of third-party sellers on its platform.
The company’s expansion into various industries has also led to concerns about its dominance and potential to stifle competition. Critics argue that Amazon’s control over data, logistics, and retail gives it an unfair advantage, making it difficult for smaller companies to compete. In response, there have been calls for greater regulation and even the potential breakup of Amazon into smaller entities.
Labor Practices and Workers’ Rights
Amazon’s labor practices have come under intense scrutiny, particularly in its fulfillment centers and delivery network. Reports of grueling working conditions, high injury rates, and inadequate breaks have sparked widespread criticism. Workers have organized protests and strikes, demanding better pay, safer working conditions, and the right to unionize.
The company’s use of technology to monitor and manage workers has also raised ethical concerns. Amazon’s reliance on algorithms to track productivity and enforce performance targets has been criticized for creating a dehumanizing work environment. The company’s resistance to unionization efforts has further fueled debates about workers’ rights and corporate responsibility.
Environmental Impact
As one of the largest companies in the world, Amazon’s environmental impact is significant. The company’s vast logistics network and rapid delivery services contribute to carbon emissions and packaging waste. Amazon has faced criticism for its role in driving consumerism and its contribution to environmental degradation.
In response, Amazon has pledged to become more sustainable. The company launched the Climate Pledge in 2019, committing to reach net-zero carbon emissions by 2040. Amazon has also invested in renewable energy, electric delivery vehicles, and sustainable packaging. While these efforts are a step in the right direction, critics argue that more needs to be done to address the environmental impact of the company’s operations.
