Both fraud alert and credit freeze are options to safeguard our identity from the risk of ID theft. But these two options are not exactly the same. What are their differences and how do you know which is the best option for you? To answer these questions, let’s discuss each of them one at a time.

Fraud Alert – How it Works

Putting your credit on fraud alert has always been the option used to protect one’s credit report. With a fraud alert, creditors are supposed to notify you whenever someone tries to open an account in your name. Thus, you can confirm if you’re really the one who’s opening the account or someone else is trying to use your identity against you.

A fraud alert lasts for 90 days, afterwards you can choose to renew the alert or leave your credit report open for access again. An extended fraud alert however is only given for those who have been victimized by identity theft. If such is the case, the alert will stay on your credit report for seven years.

How do you put your credit report on fraud alert? With just a phone call to the credit bureau, your report can immediately be put on fraud alert. Although it has been around for a long time, there are instances when creditors simply ignore the alert, putting the person at risk of stolen identity. With this in mind, a credit freeze gives a person a more reliable protection against identity theft.

Credit Freeze – What You Should Know

What is a credit freeze? As its name implies, the credit report is put on a “freeze” meaning lenders, insurers, employers, landlords, marketing companies, not even the credit report owner himself can access the report. Thus, new accounts cannot possibly be opened unless the credit freeze is lifted.

If you want to apply for a credit card or to open a loan, you need to send in a request to the credit bureau to “unfreeze” your credit report. This is because the moment you ask for a freeze, it will remain on your credit report for as long as there is no request to undo it.

Freezing and lifting the freeze can only be done by sending a letter of request. Unlike a fraud alert, a credit freeze cannot be done over the phone. The person requesting for a credit freeze would also need to enclose at least 2 valid identifications with his letter.

With regards to “unfreezing” the report, it can take several minutes to weeks depending on the credit bureau holding the credit report. Additionally, freezing and unfreezing the credit report will cost from $9 to $15 per request.

Putting your credit on freeze gives you a more reliable protection against identity theft than a fraud alert does. This is because creditors can’t simply ignore the alert on your credit report. When they try to access your report, they will get a message saying that your report is on freeze. So although it isn’t free, credit freeze is definitely worth your money.

About the Author
Melanie Mathis is a credit analyst and a writer for 8 years. She has been participating in the programs of NHBS, Inc such as their continuous effort in giving out Free Credit Repair and Building Ebook. NHBS also has a list of recommended Loans for People with Bad Credit.
Copyright 2010