The Differences Between A Fraud Alert and Credit Freeze

Both fraud alerts and credit freezes are options to safeguard your identity from the risk of ID theft. Danger Fraud AlertBut 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 a fraud alert on your credit report 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.

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

Credit Freeze – What You Should Know

What is a credit freeze? As its name implies, your credit report is put in a “frozen” status, meaning lenders, insurers, employers, landlords, marketing companies, and not even you, the credit report owner, can access the report. Thus, new accounts cannot possibly be opened unless the credit freeze is lifted. You need to write each credit bureau individually in order to have a credit freeze placed on your credit report. Once its done, each credit bureau will mail you back a password. That will be the ONLY way you can unlock your credit report. So keep these passwords somewhere safe! I personally don’t apply for a lot of new credit and so keep my passwords in my safety deposit box at the bank! Yes they are that important! If the wrong person gets those passwords they can do whatever they want with your credit file.

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 be done online or thru the mail. Doing it online will of course be the fastest way to get the freeze lifted.

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With regards to “unfreezing” the report, it will generally only take a few minutes depending on the credit bureau. You can do it by mail, phone or online. Keep in mind when you unfreeze your account, you may have to pay. It depends on the credit bureau.

Freezing your credit gives you 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 frozen and they will need to contact you to unfreeze it so they can pull your credit. So although it isn’t free, a credit freeze is definitely worth your money.

 

Elizabeth Roberts

Elizabeth Roberts

Liz Roberts and her team are continuously providing information to people who are ready to repair their credit and improve their credit score. Also NewHorizon.org team strives to empower the homebased and small business owners by bringing information that can help them to manage and grow their businesses. Let our 24+ years of business finance experience help you to get the financing you need! CONTACT US if need financing for your business.

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NewHorizon.org is an independent, advertising supported website. The owner of the site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. NewHorizon.org has not reviewed all available credit card offers in the marketplace.

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