Credit Freezes and Fraud Alerts: What Each Does and When to Use Them
A credit freeze blocks most new credit from being opened in your name. A fraud alert asks lenders to verify your identity. Both are free. Here is how they differ and how to use them.
If your personal information may have been exposed in a data breach, or you simply want to make identity theft harder, two free tools are available through the nationwide credit bureaus: a credit freeze and a fraud alert.
Credit freeze
A credit freeze (also called a security freeze) restricts access to your credit report. Most lenders won't approve new credit without checking your report, so a freeze makes it much harder for someone to open new accounts in your name.
- Free to place and lift at the nationwide credit bureaus under federal law.
- You must place it separately with each bureau.
- You can temporarily lift it when you apply for credit, then reapply it.
- It doesn't affect your credit score.
- Existing creditors, and some other parties such as certain government agencies, can still access your report.
A freeze stays in place until you remove it.
Fraud alert
A fraud alert tells lenders to take extra steps to verify your identity before opening new credit.
- Free.
- Placing one with any one nationwide bureau requires that bureau to notify the others.
- An initial fraud alert lasts one year and can be renewed.
- An extended fraud alert, available to identity theft victims with a report, lasts seven years.
- Active duty alerts are available for military members deployed away from their usual station.
A fraud alert doesn't block access to your report; it asks lenders to verify that it's really you.
Which to use
| Credit freeze | Fraud alert | |
|---|---|---|
| Strength | Blocks most new credit checks | Asks lenders to verify identity |
| Where to place | Each bureau separately | One bureau notifies the others |
| How long | Until you lift it | 1 year (initial) or 7 years (extended) |
| Effort when applying for credit | Must lift temporarily | Lenders may contact you to verify |
| Cost | Free | Free |
Many people use a freeze as their default protection and lift it briefly when they apply for credit. A fraud alert can be useful if you expect to apply for credit soon and don't want to manage freezes, or in addition to a freeze.
What neither one does
- They don't stop misuse of your existing accounts. Monitor statements.
- They don't stop tax refund fraud, medical identity theft, or government benefits fraud. Other protections exist for those.
- They don't remove fraudulent accounts already opened; you need to dispute those.
If you're a victim of identity theft
- Place a fraud alert or freeze.
- Review your credit reports from all three bureaus.
- Contact companies where fraud occurred.
- Report it to the federal government's identity theft reporting site, which provides a recovery plan.
- Dispute fraudulent accounts and inquiries; see hard vs. soft credit inquiries.
The takeaway
A credit freeze is the strongest free tool to prevent new accounts in your name. A fraud alert is easier to manage but less protective. Both are free, and neither affects your score.
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