Fraud Alert vs. Credit Freeze: Which One Should You Choose?

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Understanding Fraud Alerts and Credit Freezes

In the world of credit, you’ve probably heard the terms “fraud alert” and “credit freeze.” Both are tools to protect yourself from fraud, but they function differently. A fraud alert asks creditors to verify your identity before processing credit applications, while a credit freeze restricts access to your credit report to prevent identity theft and fraud.

What Is a Fraud Alert?

A fraud alert requests creditors to verify your identification before approving credit in your name. This is useful if someone is using your information without your permission. Placing a fraud alert at one of the three major credit bureaus (Experian, TransUnion, or Equifax) will automatically add the alert to your credit reports at the other two bureaus.

Types of Fraud Alerts

Temporary fraud alert: Lasts one year unless renewed. You can add this alert for any reason, such as wanting extra protection from fraudsters.
Active-duty fraud alert: For active-duty service members, lasting one year and renewable during deployment.
Extended fraud victim alert: Lasts seven years and is meant for victims of credit fraud or identity theft. Requires a copy of a report filed with a law enforcement agency.

How to Set Up a Fraud Alert

To place a free fraud alert, visit the Experian Fraud Alert Center, choose the type of alert you want, and follow the instructions for uploading or mailing in copies of your ID, proof of address, and any other required documentation.

What Is a Credit Freeze?

A credit freeze, also known as a security freeze, restricts creditors from accessing your credit report to open new credit accounts in your name. While it limits access to your credit report, it doesn’t prevent all entities from viewing it. Current lenders, landlords, debt collectors, and government agencies can still access your report.

How to Freeze Your Credit

You can freeze your credit at any time by contacting each of the three major credit bureaus. Here are the steps for freezing your credit online with Experian:

Sign up for a free Experian account.
Provide your name, date of birth, two-year address history, and Social Security number.
Set up a security freeze to limit access to your Experian credit report. This freeze takes effect immediately and can be removed whenever you want.

When to Unfreeze Your Credit

You can temporarily thaw or permanently unfreeze your credit report whenever you want. Experian allows you to do this online, by phone, or by email. A temporary thaw involves setting a start and end date for unfreezing your report, while permanent removal means the freeze is no longer in effect unless you reactivate it.

Should You Use a Fraud Alert or a Credit Freeze?

Choosing between a fraud alert and a credit freeze depends on your situation:

If you’re a victim of credit fraud or identity theft, consider an extended fraud alert or a credit freeze based on how often you need access to your credit reports.
If you plan to apply for new credit soon, an extended fraud alert might be simpler than a series of credit freezes and thaws.
If you don’t plan to apply for new credit in the near future, a credit freeze might be the best choice.
If your personal information has been compromised but you haven’t been a victim of crime, consider setting up a temporary fraud alert.