As technology continues to advance at an unprecedented rate, scammers and fraudsters are developing new, clever ways to take advantage of and steal from their victims. They don’t care who you are or what you do, and anyone can fall victim to their deceptive schemes. As fraudulent activities continue to rise, it is important to know how to protect yourself. There are two proactive steps you can take to lessen the threat of identity theft and help put your mind at ease: a fraud alert and a credit freeze.
Here's a breakdown of the differences between fraud alerts and a credit freeze.
A fraud alert is an effective way to enhance security. It places a warning on your credit report, requiring lenders to verify your identity before approving any application. If someone tries to open a new credit card or apply for a loan in your name, the lender will need to take extra steps to verify it’s really you. You’ll be asked to confirm your identity anytime someone accesses your credit report.
There are three types of fraud alerts you can place on your credit report.
An initial fraud alert is useful if you suspect you are a victim of fraud or identity theft. This alert is cost-free and remains active on your credit report for one year.
The extended fraud alert is the most common type. This alert can only apply to your credit report if you’re a victim of identity theft or fraud. The extended fraud alert is free and stays on your credit report for up to 7 years.
To get an extended fraud alert, you need to file an identity theft report with the Federal Trade Commission or get a police report.
The active-duty alert is offered to active-duty service members to protect them during deployment. This alert is also free and remains active for one year.
Once you place a fraud alert with any one of the nationwide credit reporting agencies, it will automatically apply to all three agencies - Equifax®, Experian™, and TransUnion®. It's important to note that while the agencies share the activation, they do not share the cancellation. If you decide to remove a fraud alert before its expiration date, you will need to contact each agency individually to do so.
A credit freeze takes an alert to the next level by restricting access to your credit report to help prevent identity thieves from opening new accounts in your name. Unlike the alerts, you will need to contact each nationwide credit reporting agency to place a freeze on your report. You can manage your credit freeze online or by phone. To manage your freeze online, you may be required to set a PIN or password to unfreeze your credit report. To manage your credit freeze by phone, you will need to provide information to verify your identity.
If you want to apply for credit or a service that checks your credit, you’ll need to temporarily unfreeze your report. This free service allows you to choose the time frame for the freeze to be lifted.
Choosing a fraud alert or a credit freeze depends on your situation.
Fraud Alert: If you’re a victim of identity theft or suspect fraud but still plan to apply for loans, a fraud alert offers more flexibility. Lenders can still access your report after verifying your identity. You can always add a credit freeze later once your applications are complete.
Credit Freeze: If you don’t plan to apply for credit anytime soon and want peace of mind knowing access to your credit report is restricted, a credit freeze is a strong option.
Both: If you’ve been a victim of fraud and don’t mind managing your credit when applying for loans or services, you can place both a fraud alert and a credit freeze for added protection.
For Minors: Children can also be targets of identity theft. While placing a credit freeze for a minor is different and more involved than for an adult, freezing their credit is a proactive step to protect their financial future.
Regardless of which option you choose, it's important to monitor your credit report for any unusual activity and regularly review your statements for unauthorized transactions. Access your credit report at annualcreditreport.com.
To place a fraud alert or credit freeze, contact the credit reporting bureaus:
Equifax.com/personal/credit-report-services or call 800-685-111
Experian.com/help or call 888-397-3742
Transunion.com/credit-help or call 888-909-8872