Credit score

Credit lock: what you need to know about securing your file

To the point Credit bureaus offers Quebec residents the ability to place a credit lock on their file in order to prevent credit fraud.

You can put a credit lock on your credit file to protect yourself from credit fraud and theft.

A credit lock is a tool that restricts access to your credit reports by certain third parties, such as lenders and creditors. Through a mobile app, it allows you to lock and unlock your credit reports using identity verification techniques, like usernames, passwords, or Touch ID or Face ID technology.

Credit Lock - The Background of Bill 53

The Credit Assessment Agents Act, or bill 53, was adopted on February 1, 2021, in response to the Desjardins data breach. This legislation allows you to access your credit report for free online and freeze it in case of fraud. It also allows you to add a security alert, which requires financial institutions to perform additional identity verification.

The law blocks access to credit reports by financial institutions and telecommunications companies, providing valuable protection against identity theft in means of a credit lock. If someone tries to obtain a loan in your name while you have a credit lock in place, the loan cannot be approved because the bank will not be able to access your credit information.

You will be free to place it from February 1, 2023; if access is asked, the credit bureau will let them know that the file is unavailable and locked under the code ’’7″ which will be associated with the ‘’credit locked“ message. From then on, the bureau will not be able to transmit any data regarding applications for:

  • A new credit contract (credit cards, credit lines, mortgage, long-term lease of goods, payment plans)
  • Credit increase
  • Credit extension

Credit Lock - The difference with Credit Freeze

The difference between a credit freeze and a credit lock is that the federal government regulates a credit freeze. In contrast, private companies offer a credit lock that can be controlled through a mobile app.

A credit freeze blocks third-party access to your credit reports, while a credit lock allows you to lock and unlock your credit reports using identity verification techniques.

A fraud alert is a free notice placed on your credit reports that alert lenders and other credit issuers to verify your identity before giving or extending credit due to possible fraud or identity theft. When triggered, the lender or creditor must take reasonable steps to confirm your identity.

Credit Lock - How to Activate It

Consumers who reside in Quebec can control their credit locks online or through the phone without charge. You can lock, suspend, or revoke your credit, and the changes will be updated in real-time or close to it, depending on the method used. The request for a credit lock made online will take effect within a few hours.

If you activate it, you must remember to remove it before trying to obtain new credit, such as applying for a new credit card. Conveniently, you can also do that online or by phone.

It is also possible to suspend your credit lock for 48 hours, after which it will automatically reactivate. By doing so, you can apply for new credit without cancelling it and remembering to enable it again.

Credit Lock - Exempt Use and Bypass

Bureaus will still allow the information to be transmitted if it is not to be used for entering a new credit contract or meddling with your current credit limits while a credit lock is in place. Some examples include:

  • Background checks and screening from employers or the government
  • Eligibility check for social services
  • Debt collection information
  • Portfolio management
  • Credit check to price and insure an existing loan
  • Tenant credit check by a landlord in the process of a rental application
  • etc.

A detailed table with all the situations the data can go through despite a credit lock can be found here.

Credit lock - Should you, do it?

The possibility of placing a credit lock is an appealing way to deter fraud attempts, and the process of installing and deactivating one on your file seems easy enough as you can do it online or with a phone call. That is something to consider, especially since it’s free to lock, suspend and unlock your file.

A credit lock can also be viewed as a hindrance to travel hackers and credit card rewards chasers. But dealing with credit fraud is a much more significant problem than taking a few minutes to remove it before a new application; as you are always on the lookout for the best credit card offers for your next trip, it can save you some hassle while you are away sipping your cocktail!

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I'm Aline, an experienced traveller, a foodie at heart, an Avgeek, a photography enthusiast and an expert on credit card programs. I use Reward Points to travel on a budget and to save money on everyday life; writing about these topics allows me to share my passion and help you. ~ 7 continents and 75 countries ~

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