How Is a Fraud Alert Different from a Credit Freeze or Lock?

Hackers steal more than 1 million records globally every hour. And improvements in technology make it easier—not harder—all the time for cyber thieves to access your personal and financial information. While identity theft is a scary thought, you aren’t helpless.

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The three major credit bureaus—Experian, Equifax and Transunion—offer three ways to help you protect yourself from someone opening an account in your name—a fraud alert, credit freeze and a credit lock. Though they sound the same, each one provides a different level of protection and impact and each has different requirements.

What Are Fraud Alerts?

A fraud alert is a basic form of credit protection. It acts as a roadblock that makes it harder for thieves to open an account in your name. If you have a fraud alert in place, a lender or other business isn’t supposed to open an account for you without first taking steps to verify that the account is, in fact, for you and not someone pretending to be you.

Unlike with a credit freeze, your credit file is still accessible to business and lenders. There’s just an added step that must be taken before the lender or another business opens an account in your name.

Because you provide your contact information when you set up the alert, inquiring banks often use your telephone number to contact you if someone, including you, is trying to open a new account in your name. This gives you the opportunity to confirm or deny that you applied for the account.

Three Types of Fraud Alerts

There are three different types of fraud alerts that you can add to your credit reports at the three credit bureaus.

• An initial fraud alert can be added by anyone at any time and for any reason. You can add it at any one of the three reporting agencies. The bureau you request an alert from has to let the other bureaus know about The other two then have to add an initial fraud alert to your report as well. An initial alert automatically expires after a year.
• An extended fraud alert requires that you verify that you’re a victim of identity theft or fraud. Verification involves sending an identity theft report with a copy of a police or other law enforcement report. Requesting an extended alert, as with an initial fraud alert, can be done at one of the reporting agencies who then has to alert the other two bureaus on your behalf. An extended fraud alert stays on your report for seven years.
• An active-duty alert or active-duty fraud alert is used for active military service members. Like an initial fraud alert, it lasts for one year but can be extended if the service member remains deployed. Like the other alerts, opening an active-duty at one bureau requires that reporting agency share it with the other two.

What Is a Credit Freeze and Credit Lock?

While a fraud alert instructs businesses to take steps to verify your identity before opening a new account, it doesn’t keep them from looking at your credit file. A credit lock or credit freeze, also called a security freeze, does prevent anyone from looking at—or making a hard inquiry on—your credit report.

A lock or freeze prevents a business or lender from even considering you for a loan or account, where an alert lets them see your credit report. With an alert, they can get to the point of wanting to extend you the loan or account, but not actually opening it without first verifying you’re the one who wants the loan or account.

With a freeze or lock in place, the lender can still make a soft inquiry against your credit report. So you can still get pre-approved credit card offers or have a prospective employer check your credit.

Initial fraud alerts and credit freezes are covered by government laws, specifically the Economic Growth, Regulatory Relief, and Consumer Protection Act, which requires they be free for one year.

Credit locks are not necessarily free or covered by laws. They are credit industry products.

Locks and freezes last until you lift them. Ending a freeze requires a PIN you receive when you place the freeze. Ending a lock can be done simply by asking the company who placed the lock usually online or by phone.

When to Place a Fraud Alert

Requesting a credit card fraud alert is easy and won’t hurt your credit score or affect your reports. It’s okay to request one at any time. Because an alert only lasts a year, you may want to reserve requesting one for when you think you might be in jeopardy, such as:

• You notice fraudulent activity on any of your accounts.
• You think you are a victim of fraud.
• Your information may be at risk in a data breach.
• Your wallet, credit card, Social Security card, etc. was lost or stolen.
• You want to take extra precautions against identity theft.

When in doubt, a fraud alert gives you some reassurance. If you’re planning to take out a loan or apply for a credit card soon, an alert gives you some protection without restricting your ability to apply for financing.

If you have a credit freeze or lock in place and you apply for a loan or credit card, you’ll have to at least temporarily lift the freeze or lock and take extra steps. Those steps aren’t cumbersome but will take a small amount of time. If you choose a lock or freeze, simply know that you’ll have to do some work—more than answering a phone call—if you need a new loan or credit card and have one in place.

How to Apply for a Fraud Alert

Experian lets you submit a fraud alert request online. You can enter either your personal information or identifiers from a recent credit report. If you’d prefer not to input your Social Security number, you have the option to upload other documents to verify your identity.

TransUnion lets you request a fraud alert online through TransUnion by creating an account and completing the online form.

Equifax lets you create an account and file for a fraud alert online. With Equifax, you can also mail in an application or set up an alert by phone at 800-525-6285.

What Else Can You Do to Protect Yourself?

A fraud alert, credit freeze or credit lock are just some of the tools you can use to protect yourself from identity theft. Another tool you can use is your credit score. Using a service, such as Credit.com, to monitor your credit score can alert you to any changes in your score which can indicate something—or someone—has abused your credit.

You can sign up for a free Experian VantageScore credit score or a $1 FICO credit score from Credit.com. Your score includes access to a free credit report card—shown below—that tracks the five key areas that go into your score—payment history, debt usage, credit history, account mix and inquiries.  Your score and your report card are updated every two weeks, so you can see any changes and take action if needed, including adding a fraud alert, freeze or lock when needed.

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