What To Know About Credit Freezes and Fraud Alerts (2024)

FAQs

What To Know About Credit Freezes and Fraud Alerts? ›

A fraud alert simply requires that creditors verify identity before opening new credit. A credit freeze cuts off access to your credit reports unless you lift the freeze, which makes it unlikely new credit accounts can be opened in your name without your consent. Fraud alerts and credit freezes are free.

Placing a fraud alert does not affect your credit scores. It alerts creditors that you may have been a victim of fraud and encourages them to take extra steps, such as contacting you at a phone number you provide, to verify your identity before extending credit in your name.

While a security freeze can help protect you by preventing certain access to your credit reports if someone attempts to open a new credit account in your name, it can't help protect you against other forms of fraud, such as a stolen credit card number.

When you have a security freeze on your credit file, certain entities still have access to it. Your report can still be released to your existing creditors or to collection agencies acting on their behalf. They can use it to review or collect on your account.

Fraud alerts encourage lenders and creditors to take extra steps to verify your identity, such as contacting you by phone, before opening a new credit account in your name or making changes to existing accounts. This can make it harder for someone to open unauthorized accounts in your name.

It's simpler to put a credit fraud alert in place — you can do it with a single phone call — but a credit freeze offers better protection. Also, fraud alerts expire automatically, while credit freezes last until you lift them.

Then, if you're worried about identity theft, you've been a victim of fraud or you're deployed in the military, you should set up the appropriate fraud alert, too. "It is not redundant, because when you remove the credit freeze, the fraud alert would still be on there," Kohlweiler says.

A freeze can give you a false sense of security — you may still be susceptible to credit fraud or other fraud involving your Social Security number. A credit freeze won't affect your current accounts, but if a thief steals the information on an existing account, your credit may be used without your permission.

Locking your Social Security number prevents anyone — including you — from changing or accessing your Social Security record. If your Social Security number is compromised and you're already the victim of identity theft, act quickly to safeguard your personal information.

When freezing your credit to limit the processing of new credit applications, you must make a separate freeze request at each of the national credit bureaus (Experian, TransUnion and Equifax).

How long is a credit freeze good for? ›

Placing a credit freeze is free for you and your children, as is lifting it when applying for new credit. A credit freeze lasts as long as you want it to.

While credit lock vs. freeze might sound different, they function similarly: A credit freeze is a free service that stops new accounts from being opened, while a credit lock is a service from the credit bureaus that lets you lock and unlock your credit faster than a freeze.

A credit freeze prevents lenders from checking your credit file. Freezing your credit has no effect on your credit score. But this doesn't mean that a credit freeze blocks your score from regular changes. It's still important to monitor your credit use and make payments on time to keep your score from falling.

A fraud alert is a self-imposed warning placed on your credit report that requires any lenders or financial institutions to contact you before opening any new lines of credit in your name. While they don't prevent new accounts from being opened in your name, they do provide an extra security step.

Consequences Ahead

If you just ignore the messages, Ulzheimer says, "the issuer will likely disallow recent charges and suspend your credit line." One factor to consider: whether the charge is in fact fraudulent.

What is a credit freeze? When you place a security freeze, creditors cannot access your credit report. This will keep them from approving any new credit account in your name, whether it is fraudulent or legitimate.

The quickest and easiest way to unfreeze your credit report is to contact the credit bureau (or bureaus) you used to freeze your credit either online or by phone. But you also have the option to contact them by mail.