Differences Between Fraud Alerts and Credit Freezes Explained
In the digital age, protecting your personal information and credit is more important than ever. Two key tools that can help safeguard your financial well-being are fraud alerts and credit freezes.
A fraud alert, as the name suggests, places a warning on your credit report, requiring companies to verify your identity before they can extend new credit. This added layer of security can be especially helpful if your personal information has been exposed in a data breach or if you suspect potential identity theft. To place a fraud alert, you need to notify only one of the three credit bureaus - Experian, Equifax, or TransUnion. They will then inform the others, and the alert lasts for a year and can be renewed.
On the other hand, a credit freeze locks down your credit reports with the major credit bureaus, preventing new credit accounts from being opened in your name. Unlike a fraud alert, a credit freeze blocks all access to your credit report entirely, which can be ideal for those who do not plan to open new credit in the near future. To freeze your credit, you'll have to contact each credit bureau separately. It's important to note that a credit freeze will not harm your credit score.
Here's a comparison of the two:
| Feature | Fraud Alert | Credit Freeze | |---------|-------------|---------------| | Effect | Requires lenders to verify identity before issuing credit | Blocks access to credit report entirely | | How to place | Contact one of the three credit bureaus; they notify the others | Must contact all three credit bureaus separately | | Duration | Lasts 1 year and must be renewed | Remains until you lift it (indefinite) | | Accessibility | Lenders can still access credit report with extra verification | Lenders cannot access credit report at all | | Impact on your credit activity | Allows normal credit activity with added verification | Prevents new credit from being opened completely until lifted | | Best for | People expecting to apply for new credit soon; ongoing credit activity | People not planning to apply for new credit, such as older adults or children |
When deciding which tool to use, consider your credit access needs and risk level. If you suspect potential identity theft but need to keep easy access to your credit for upcoming applications (loans, credit cards, mortgages), a fraud alert might be the best choice. On the other hand, if you do not plan to open new credit in the near future and want stronger protection, a credit freeze could be more suitable.
It's important to note that both tools do not affect existing accounts or stop fraud on current credit lines — regularly monitoring your accounts remains crucial.
Active-duty military service members also have additional options. They can request an active-duty fraud alert, which lasts a year and is designed for military service members. Additionally, active-duty service members can remove their names from marketing lists for unsolicited credit and insurance offers for two years. Furthermore, active-duty service members can get free electronic credit monitoring.
In emergencies, you can place a temporary fraud alert, which lasts for 90 days, by contacting any one of the credit bureaus. If you're a victim of identity theft, you can also request an extended fraud alert, which lasts for seven years.
Here are the contact numbers for the major credit bureaus:
- Experian: 888-397-3742
- TransUnion: 888-909-8872
- Equifax: 800-685-1111
Remember, staying informed and taking proactive measures to protect your credit is essential in today's digital world. By understanding the differences between fraud alerts and credit freezes, you can make informed decisions to safeguard your financial future.
[1] Federal Trade Commission. (n.d.). Protect Yourself: Identity Theft. Retrieved March 29, 2023, from https://www.consumer.ftc.gov/articles/0497-protect-yourself-identity-theft [2] Federal Trade Commission. (n.d.). Free Credit Freeze. Retrieved March 29, 2023, from https://www.consumer.ftc.gov/articles/0497-protect-yourself-identity-theft#freeze [3] Federal Trade Commission. (n.d.). Security Freeze. Retrieved March 29, 2023, from https://www.consumer.ftc.gov/articles/0497-protect-yourself-identity-theft#freeze [4] Federal Trade Commission. (n.d.). Active-Duty Military Alerts. Retrieved March 29, 2023, from https://www.consumer.ftc.gov/articles/0497-protect-yourself-identity-theft#active-duty-military-alerts [5] Federal Trade Commission. (n.d.). Fraud Alerts. Retrieved March 29, 2023, from https://www.consumer.ftc.gov/articles/0497-protect-yourself-identity-theft#fraud-alerts
Read also:
- Trade Disputes Escalate: Trump Imposes Tariffs, India Retaliates; threatened boycott ranges from McDonald's, Coca-Cola to iPhones
- Li Auto faces scrutiny after crash test involving i8 model and a truck manufacturer sparks controversy
- Celebrated Title: Cheesemakers Blessed Upon
- Construction and renovation projects in Cham county granted €24.8 million focus on energy efficiency
