Helpful Home Tips &
Mortgage Advice from Experts


Back to Posts
Military toys protecting keyboard

What is the Difference Between a Credit Freeze and a Fraud Alert?

Share on Facebook0Share on LinkedIn0Tweet about this on TwitterShare on Google+0Email this to someone

 

If your identity or personal information has been compromised in any way, you might consider protecting yourself by making changes to your credit reports that would make it difficult for thieves to open accounts under your name and ruining your financial integrity. You can do this by either placing a security freeze on your credit reports or by placing credit fraud alerts on them. So, what’s the difference between the two?

Credit Freezes

According to the Federal Trade Commission, a credit security freeze stops any and all access to your credit report by blocking hard credit pulls, or requests for your credit report information at the time you apply for a credit account of any kind. This will not stop your current creditors from doing routine soft pulls of your credit as they normally do.

If you want to apply for credit during a credit freeze, you will have to call the credit bureau and temporarily lift your freeze while the new creditor pulls your credit report. This service sometimes has a fee associated with it. Freezing your credit is something you, the consumer, initiate for an indefinite period of time. That is, the credit freeze will remain active on your credit report until you choose to remove it.

A credit security freeze provides the highest level of protection against identity theft, but it also comes with potential complications for the consumer because of the necessary hoops you’ll need to jump through to apply for credit while under a credit security freeze. In addition, you must apply credit security freezes to all three of the major credit reporting bureaus—Equifax, Experian, and TransUnion.

Credit Fraud Alerts

A credit fraud alert provides a good level of protection against identity theft, but is less invasive than a complete credit security freeze. Instead of freezing your credit reports altogether, a credit fraud alert is an alert you can place on each of your credit reports that will make it necessary for you to verify your identity with a series of personal questions each time you apply for credit.

A credit fraud alert will make “instant approval” credit decisions impossible, but it will protect you from having accounts opened in your name under fraudulent pretenses.

The FTC says that some credit reporting agencies may charge a fee for you to initiate a credit freeze, but that credit fraud alerts are guaranteed under federal law to be made available for free. There is no cost to initiate or remove a credit fraud alert from your credit report for any of the three major credit reporting bureaus—Equifax, Experian, or TransUnion.

Considerations

Depending on the type of information that was stolen or compromised, you should be able to choose whether a full credit security freeze is necessary for you or if credit fraud alerts will be sufficient.

If there are concerns that your full identity has been compromised in every facet, a credit security freeze may be the best course of action to take to fully protect yourself from the nightmare that is identity theft. Otherwise, a credit fraud alert placed on each of your three credit bureau reports might be sufficient and less invasive.