Key takeaways
- A credit freeze blocks most new lenders from seeing your credit report, so it’s hard for anyone to open new accounts in your name.
- A fraud alert tells lenders to take extra steps to verify your identity before opening an account.
- Both are free. Neither affects your credit score.
- A freeze must be placed with each of the three bureaus. A fraud alert needs only one.
- If you’re dealing with debt, watch for identity theft too. Accounts you didn’t open can add to your problems.
When you’re working through debt, the last thing you need is someone opening new accounts in your name. Credit freezes and fraud alerts are two free tools that make that much harder. They work differently, and many people use both.
Side by side
| Credit freeze | Fraud alert | |
|---|---|---|
| What it does | Blocks most access to your credit report for new credit | Tells lenders to verify your identity before opening credit |
| Cost | Free to place and lift | Free |
| How long | Until you lift it | One year (renewable); seven years with an identity theft report |
| Where to place it | Each of the three bureaus separately | Any one bureau, which tells the other two |
| Effect on your score | None | None |
Source: the FTC’s guide to credit freezes and fraud alerts.
How a credit freeze works
A credit freeze, also called a security freeze, restricts access to your credit report. Since most lenders check your report before opening a new account, a freeze makes it hard for an identity thief to open credit in your name.
- It’s free to place and lift, according to the FTC.
- You contact each bureau: Equifax, Experian and TransUnion. A freeze at one doesn’t cover the others.
- It stays until you lift it. When you apply for credit, you can lift it temporarily, then put it back.
- Your existing accounts keep working. Your current lenders can still see your report, and you can still check your own.
How a fraud alert works
A fraud alert puts a note on your credit report telling lenders to take extra steps, like calling you, to verify your identity before opening an account.
- Initial fraud alert: lasts one year and can be renewed. You only need to contact one bureau, which must tell the other two.
- Extended fraud alert: lasts seven years. You need an identity theft report from IdentityTheft.gov or a police report.
- Active duty alert: for service members deployed away from their usual duty station. It lasts one year and can be renewed.
Which one should you use?
Use a credit freeze if:
- Your information was exposed in a data breach.
- You’ve been a victim of identity theft.
- You’re not planning to apply for credit soon and want the strongest protection.
Use a fraud alert if:
- You think your information might have been stolen and want quick protection with one call.
- You’ll be applying for credit soon and don’t want to lift a freeze.
- You’re on active duty and away from home.
Use both for extra protection if you’ve been a victim of identity theft.
What neither one does
- They don’t stop fraud on accounts you already have. Watch your statements.
- They don’t stop all types of identity theft, like tax or medical identity theft.
- They don’t remove anything from your credit report. To fix errors, see how to dispute an error on your credit report.
If you think you’re a victim
- Go to IdentityTheft.gov to report it and get a recovery plan.
- Place a fraud alert or freeze.
- Check your credit reports at AnnualCreditReport.com. Our guide on how to read your credit report shows what to look for.
- Dispute any accounts you didn’t open.
- If a collector contacts you about a debt that isn’t yours, dispute it in writing. See how to ask a debt collector to prove a debt and fake debt collectors.
The bottom line
A credit freeze is the strongest free protection against new accounts in your name. A fraud alert is quicker to place and lets you keep applying for credit, with extra checks. Neither affects your score, and you can use both.
Sources: FTC: credit freezes and fraud alerts · IdentityTheft.gov · FTC: free credit reports