Fraud alerts and security freezes are both important tools that can help you protect yourself from identity theft by preventing credit card, phone and loan accounts from being opened in your name. However, the differences between the two and what you have to do to use them can often be confusing.
We recently received a message from Jill* about her confusion in dealing with these services. She had placed a fraud alert—now expired—and was trying to set up a security freeze at only one of the credit-reporting agencies, but read a HuffPost article saying that the request would be void if she didn’t contact all of them.
Let’s break it down…
A fraud alert places a red flag on your credit reports at the three major credit-reporting agencies (Equifax, Experian and TransUnion)—alerting potential creditors to take extra precautions before extending credit. Typically, creditors will call you to verify your identity before issuing any new credit.
When you request a fraud alert from one agency,
- it will notify the other two for you (you only need to contact one)
- it will currently last for 90 days, but will last for one year starting on September 21, 2018 (can be renewed)
- it will always free
- it can be extended to seven years, if you’re a victim of identity theft
A security freeze (aka credit freeze) can lock your credit files at these agencies until you unlock them. This stops new accounts from being made as new creditors aren’t able to check your credit report—making it much more effective than a fraud alert in preventing identity theft.
When you request a security freeze,
- you must notify each of the three credit-reporting agencies separately (one is not enough)
- it will last indefinitely (until you request that it be lifted)
- it may currently involve fees (depending on your state’s laws), but will be free across the U.S. starting on September 21, 2018
Ultimately, it's up to you as to which is the best fit for your needs. While the process of initiating one is a bit easier, a fraud alert can leave you less protected than a security freeze in the end. A security freeze does keep your credit more secure, but can be less convenient to both start and stop (especially if you need access to your credit immediately).
Do you have your own story about trying to set up a security freeze or fraud alert? Please share it with us!