Fraud Alert vs. Credit Freeze: What’s the Difference?

What Is a Fraud Alert?

A fraud alert asks creditors who view your credit report to verify your identification before approving credit in your name in case someone is using your information without your permission. Placing a fraud alert at one of the three major credit bureaus (Experian, TransUnion or Equifax) will automatically add the alert to your credit reports at the two other bureaus.

You can request one of these three types of fraud alerts:

• Temporary fraud alert: Also known as an initial fraud alert, this type of alert expires after one year unless you renew it. You can add this alert whenever you want, for any reason, such as simply wanting extra protection from fraudsters.
• Active-duty fraud alert: Active-duty service members can set up this type of alert when they’re deployed. An active-duty fraud alert lasts one year, and it can be renewed as long as needed during deployment.
• Extended fraud victim alert: An extended fraud victim alert lasts seven years. It’s meant to protect victims of credit fraud or identity theft. If you’ve reported an incident of credit fraud or identity theft to authorities, you can obtain an extended fraud alert by submitting a copy of the report you filed with a law enforcement agency.

All fraud alerts can be renewed (up to three months before they expire), but active-duty and extended fraud victim alerts require you to resubmit the required documentation.

How to Set Up a Fraud Alert

To place a free fraud alert, visit the Experian Fraud Alert Center, choose the kind of alert you want and follow the instructions for uploading or mailing in copies of your ID, proof of address and any other required documentation.

As part of your fraud alert request, you must submit a copy of a state-issued ID (such as a driver’s license) and a piece of mail (such as a utility or insurance bill) as proof of your address.

When to Lift a Fraud Alert

Unlike a credit freeze, a fraud alert shouldn’t present a barrier to you securing new credit, so it’s unlikely you’ll need to lift it before it expires. If you do decide to remove a fraud alert, however, you should do so only if you’re certain that you’re out of immediate danger of fraud or identity theft. To lift a fraud alert, you’ll need to contact each credit bureau individually.

You also can let it expire on its own—after one year for a temporary fraud alert or active-duty fraud alert, and after seven years for an extended fraud alert—if you feel the danger of becoming a victim of fraud or identity theft has passed.

What Is a Credit Freeze?

A credit freeze, also called a security freeze, prevents creditors from accessing your credit report in order to open new credit accounts in your name. A credit freeze is designed to protect consumers from fraud.

While a credit freeze limits access to your credit report, it doesn’t keep all people and organizations from looking at it. Aside from you viewing your own report during a freeze, others that can view it include:

• Current lenders and card issuers that conduct credit checks to manage accounts
• Landlords and rental agencies that are reviewing your application to become a tenant
• Debt collectors pursuing a payment
• Credit card issuers that have prescreened you for credit offers
• Prospective employers who’ve gained your permission to conduct a background check
• Child support agencies
• Government agencies carrying out court orders or warrants

How to Freeze Your Credit

You can freeze your credit at any time, but you must contact each of the three major credit bureaus to do so.

Here are the steps for freezing your credit online with Experian:

1. Sign up for a free Experian account (if you don’t already have one).
2. Provide your name, date of birth, two-year address history and Social Security number.
3. Set up a security freeze to limit access to your Experian credit report. This freeze takes effect right away and can be removed whenever you want.

If you request a security freeze online or by phone, a credit bureau must activate the freeze within one business day. If the request is made by mail, a credit bureau must activate the freeze within three business days.

When to Unfreeze Your Credit

You can temporarily thaw or permanently unfreeze your credit report whenever you want. Experian allows you to do this online, by phone or by email. A temporary thaw involves setting a start and end date for unfreezing your report, while permanent removal means the freeze is no longer in effect unless you reactivate it.

If you request an unfreeze online or by phone, a credit bureau must unfreeze your credit report within one hour. For mailed requests, the freeze must take effect within three business days.

When you plan to apply for new credit—such as a credit card, mortgage or auto loan—you should thaw or unfreeze your credit report. Otherwise, a potential creditor won’t be able to see your credit report and thus will not be able to evaluate your application.

Should You Use a Fraud Alert or a Credit Freeze?

Some situations might call for a fraud alert, while others might be better handled with a credit freeze. Here’s a rundown of when you should use one or the other:

• If you’re a victim of credit fraud or identity theft, choosing between an extended fraud alert and a credit freeze may come down to how often you expect to need access to your credit reports. In addition to the scenarios below, consider whether you’re comfortable with a fraud alert, which requires lenders to take extra measures to verify your identity in the event you (or others) apply for credit in your name, or whether you’d prefer the added limitations of a credit freeze.
• If you plan to apply for several types of new credit, such as an auto loan, mortgage or credit card, within the next few years—or perhaps you’re eyeing a new apartment or new cellphone service provider—it might be simpler to activate an extended fraud alert instead of a series of credit freezes and thaws.
• If you don’t plan to apply for a new credit card or loan in the near future, a credit freeze might be the best choice. However, you may need to thaw your credit reports if non-lenders like cellphone and internet service providers need to conduct credit checks.
• If you’re worried that your personal information has been compromised but you haven’t been the victim of crime, consider setting up a temporary fraud alert. You can cancel the fraud alert at any time or renew it each year, depending on your circumstances.

The Bottom Line

Fraud alerts and credit freezes are two of the free tools you can use to combat credit fraud and identity theft. But they’re used in different ways: Fraud alerts are typically more temporary and allow access to your credit file with added identity verification, while credit freezes have more restrictions on credit file access and can last indefinitely. In tandem with these tools, it’s smart to regularly review your credit report from Experian for free so you can spot any potentially suspicious activity.