How to protect your credit reports from fraud

Know how you can ensure the safety of your credit reports.

A credit report is just as important as the rest of your finances. Having your credit reports stolen or becoming a victim of identity theft would be a nightmare for anyone. However, help is at hand and most credit bureaus have adopted measures to handle such incidents. This is where credit lock and credit freeze come in. You can use one of these precautionary measures to safeguard your credit reports from negative consequences and credit fraud. 

A free service, credit freeze blocks access to your credit file whereas credit lock is a paid service at various credit bureaus. Essentially, credit freeze and credit lock are great for protecting your credit reports, but enabling them also requires a lot of planning. You can avert financial fraud and identity theft with the help of these tools. Approach a credit bureau or visit their website to understand the procedure in greater detail. 

Is credit freeze the right option for you?
Credit freeze entails a lengthier process and you have to approach a credit bureau to freeze your credit reports. In this tech age, data breach is officially a problem. In such a scenario, credit freeze gives better protection than credit lock. It is a smart move when you are in doubt about the safety of your credit reports. Putting a credit freeze in place involves getting a personal identification number (PIN) or password, which is necessary while lifting the freeze on your credit report. Another way to reverse the freeze is to call the credit bureau. Alternatively, credit bureaus have a credit freeze page on their official website, which you can visit to reverse the freeze.

When you initiate a credit freeze, financial institutions cannot access your credit report till you unfreeze it. It is important to note that to freeze your credit report, you should initiate the credit freeze procedure with all the six credit bureaus in India such as CRISIL, Experian, Equifax, CIBIL, CRIF High Mark and ICRA.

Related: Credit card fraud is real

When should you use credit lock?
Credit lock means an instant lock on your credit reports. Easier and less time-consuming, a credit lock is definitely more convenient. However, cost is a factor as this service is not free. On the plus side, credit locks are easy to use and manage. You can instantly lock and unlock the credit lock on your credit report using a smartphone app or by going to a secure website. You do need to be tech-savvy and that’s it. You can lock your credit report without having the need to remember any PIN. It is used as a preventive measure to protect one's credit score file.

As with a credit freeze, a credit lock also ensures that your credit report is inaccessible to financial institutions.

Related: Taking Charge Of Your Credit Score [Premium]

Last words
Identity theft and scams are a reality in this increasingly online world and it is wiser to be aware of the dangers of such eventualities. Setting up fraudulent accounts in someone’s name is a possibility worldwide. According to the Fraud Report 2016, identity theft made up about 77% of fraud cases in India in 2015 and it is a big reason for worry. 

In India, it ultimately doesn’t matter if you use the credit freeze or credit lock facility as you need to check with the six credit bureaus – CIBIL, Experian, Equifax, CRISIL, ICRA, and CRIF High Mark. Both credit freeze and credit lock are very effective in keeping your credit reports safe and sound. Now that you know the features of each, choose one to secure your financial dealings and transactions. Fraudsters beware, opening an account in someone else’s name may now be futile! All you need to know about obtaining your credit report