A fraud or credit alert and a credit freeze both are means for dealing with identity theft and credit fraud by making it harder for someone to obtain credit in your name, but they differ in several respects.
In order to place a fraud alert on your credit report, you request it through one of the main three credit bureaus (Equifax, Experian, TransUnion), who will subsequently notify the other two. For a credit freeze, you need to notify each of the bureaus separately.
There is no charge for a fraud alert. A credit freeze usually costs $10 per credit bureau, plus another $10 to lift, temporarily or permanently.
An initial fraud alert stays in effect for three months. You can extend it an indefinite number of times for additional three month intervals. There is also a provision to make it seven years rather than three months if you don’t want to have to keep renewing like that, but this requires providing a police report or other official records establishing that you have been a victim of identity theft (rather than just that you suspect it or you wish to be extra cautious). A credit freeze stays in effect until you lift it.
But more importantly, what is a fraud alert, and what is a credit freeze?
A fraud alert tells anyone who checks your credit—such as someone considering offering credit to you (or a person claiming to be you)—that you have alerted the credit bureaus that you have been, or suspect you might be, the victim of identity theft. This puts them on notice that they better be extra careful that the person claiming to be you is really you, by checking ID and other information a lot more carefully.
A fraud alert entitles you to a free credit report from each of these three bureaus (in addition to the one free report per year you can already can get). The extended, seven year version of a fraud alert entitles you to three free credit reports per year rather than the usual one.
A credit freeze takes matters an important step farther.
If you put a freeze on your credit record, no one—again including someone considering giving you (or a person claiming to be you) credit—can access your credit report at all. Which, needless to say, means they will not extend credit.
So a fraud alert tells them to take extra precautions in using the information from your credit report; a credit freeze blocks them from even getting the information they need from your credit report.
Your current creditors are exempt from a credit freeze. You are given a PIN to be able to temporarily lift the freeze if you want to let any other party have access to your credit report.
Summing up some of the pros and cons:
Advantages of the fraud alert:
* A fraud alert is the easier of the two to put in effect, as you need only notify one of the three bureaus.
* A fraud alert is less expensive, as you have to pay to place (and pay again to lift) a credit freeze.
* A fraud alert entitles you to additional free credit reports.
* A fraud alert is the easier of the two for you to still get credit that you want. A potential creditor will give you greater scrutiny to make sure you are you, but will still have access to your credit report to make an informed decision about extending you credit, without your having to do anything to release it.
Advantages of the credit freeze:
* A credit freeze is easier to keep in place. A fraud alert requires you to renew it every three months, or to provide proof of identity theft to keep it for an extended term.
* A credit freeze makes it even harder for someone to fraudulently obtain credit in your name. A fraud alert just puts potential creditors on notice to be extra cautious, but a clever crook with sophisticated fake ID could still succeed in convincing them he is you. A credit freeze more fully blocks new credit in your name.
Both fraud alerts and credit freezes can be useful tools for mitigating the damage of identity theft and credit fraud. Which, if either, is appropriate to use will depend on your specific circumstances.
“Defend: Recover From Identity Theft”
“Fraud Alert vs. Credit Freeze”