What’s the Difference Between a Credit Freeze and a Fraud Alert?

Credit freezes and fraud alerts help protect your credit data from fraudulent use. Learn the difference.

Are you considering a credit freeze or a fraud alert? Both of these options make it more difficult for an identity thief to open a new account in your name, but they don't offer the same amount of protection. Read on to get information that can help you figure out which option is best for you.

What’s a Credit Freeze?

A credit freeze seals your credit history by preventing a credit reporting company from releasing your credit information to a third party. If a thief tries to use your Social Security number and other personal information to apply for a mortgage loan, credit card, or other forms of credit, the creditor would reject the application because it couldn’t check your credit score. It won't prevent misuse of your current accounts though. (Learn the difference between a credit report and credit score.)

How to Set Up a Credit Freeze

To protect your file with the three major credit reporting agencies—Equifax, Experian, and TransUnion—you have to initiate a freeze with each bureau. (Learn more about credit freezes, including how to set one up, in What's a Credit Freeze and When Should I Use One?)

How to Unfreeze and Refreeze Your File

Once your credit file is under a credit freeze, creditors will only be able to access your account if you unfreeze it for a specific time period or a specific company or person. To unfreeze and refreeze your credit file, you’ll need to use a Personal Identification Number (PIN).

Cost to Freeze Your Credit Files

The cost and requirements for adding and removing a freeze used to vary from state to state. But as of September 21, 2018, the federal Economic Growth, Regulatory Relief, and Consumer Protection Act (Senate Bill 2155) made placing and lifting a credit freeze free, no matter where you live. (15 U.S.C. § 1681c-1).

In most cases, a credit freeze lasts indefinitely—unless you lift it. You can unfreeze your file with one or all of the bureaus as needed. Under federal law, the bureau must remove the security freeze not later than:

  • if you make the request by toll-free telephone or secure electronic means, one hour after receiving the request for removal, or
  • if you make the request by mail, three business days after receiving the request. (15 U.S.C. § 1681c-1).

What’s a Fraud Alert?

When you place a fraud alert on your credit file, a creditor has to take extra steps to verify the identity of the person requesting credit before proceeding with the transaction. It doesn’t cost anything to place a fraud alert on your credit file.

The following types of fraud alerts are available:

Initial Fraud Alert

You can request an initial fraud alert if you think that you might become a victim of identity theft. The alert expires after one year, though you can renew it.

What the Fraud Alert Does

When there's an alert on your file, a business has to take reasonable steps to verify your identity before issuing credit. So, because the business may try to contact you, a fraud alert might delay your ability to get credit.

How to Place an Initial Fraud Alert on Your Credit File

You don’t need to produce an Identity Theft Report or any other documents to set up an initial alert. Simply contact one of the three major credit bureaus—Equifax, Experian, or TransUnion. After you request a fraud alert at one of the three bureaus, your fraud alert will be automatically added to the other two companies.

Other Benefits of Fraud Alerts

You can get one free copy of your credit report from each bureau after you place an initial alert on your file.

What's an Extended Fraud Alert

If you are a victim of identity theft, you can request that it place an extended alert in your file. The alert lasts seven years.

What the Extended Fraud Alert Does

Once an extended fraud alert is in place, a creditor should not grant new credit in your name unless it first takes reasonable steps to confirm your identity by contacting you directly at the telephone number you provided or by another reasonable method you've specified.

How to Place an Extended Alert on Your Credit File

To place an extended alert on your file, you’ll have to provide proof of your identity and an official report, typically an Identity Theft Report.

Other Benefits of Extended Fraud Alerts

You can get two free copies of your credit report from each bureau during the next 12 months after placing this kind of alert on your file. In addition, each bureau must exclude you from lists that it prepares for creditors or insurers with offers of credit or insurance that you did not request (called "prescreened offers") for five years.

Active Duty Alert

If you are on active military duty and want to minimize your risk of identity theft while you’re deployed, you can add an active duty alert to your file. This kind of alert is similar to the other alerts, but it remains in place for a year. Your name is removed from preapproved firm offers of credit or insurance (prescreening) for two years.

Choosing a Credit Freeze or a Fraud Alert

To prevent an identity thief from opening new accounts in your name, a credit freeze is considered a much better option than a fraud alert. You should most likely go with a credit freeze if:

  • you know someone has stolen your identity
  • you've been told that your personal identifying information has been compromised, like in a data breach
  • if you suspect someone has stolen your Social Security number and other information, such as your date of birth, that can be used to open credit in your name, or
  • you want to be extra cautious about your credit files.

    You may choose to have a freeze and an alert on your files at the same time. That way, even if you lift a freeze so that a creditor can access your credit history, that creditor still has to take reasonable steps to verify that you're the one requesting new credit.

    Whatever identity theft protection method you pick is entirely up to you, but no matter what you choose, you should also regularly get copies of your credit report from each of the credit bureaus. Under federal law, you may get a free copy of your credit report every 12 months from each credit reporting agency. Also, as of January 2020, you can get six free credit reports each year for seven years from Equifax as part of a 2019 data breach settlement.)

    Review the reports for all possible signs of trouble, like accounts you didn't open, inquiries you didn't initiate, and defaults and delinquencies you didn't cause. Ask the credit reporting agencies to delete information related to identity theft from your credit report. (Learn about disputing inaccurate information in your credit report.)

    Getting Help

    To learn more about preventing identity theft or how to handle identity theft after it happens, go to the FTC's identity theft website at IdentityTheft.gov. To learn about state and federal identity theft laws and find other victim resources, visit the Identity Theft Resource Center. For a list of companies that have had data breaches, visit the Privacy Rights Clearinghouse.

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