Fraud Alert vs. Credit Freeze: Which Is Better & How To Choose

January 9, 2023

Both tools can help protect your personal information and identity. But what’s the difference and when do you choose a fraud alert vs. a credit freeze?

A see-saw with an alert on one end and a credit score encased in ice on the other

Many people use the terms fraud alert, security freeze, credit freeze, and credit lock interchangeably.

While all of these tools are valid methods for protecting your credit against scammers, there are some big differences between them that you should be aware of.

Fraud Alert

Credit Freeze

Purpose

Puts a warning on your credit file so that lenders take extra steps to verify your identity.

“Freezes” your credit history so that potential lenders can’t access it.

How to request one

Contact one of the three major credit bureaus (Experian, Equifax, and TransUnion). By law, the bureau you contact must inform the other two of the fraud alert.

You have to request a credit freeze with each of the three major credit bureaus (Experian, TransUnion, and Equifax).

Who should use it

Anyone who suspect or know they’ve been the victim of identity theft.

Anyone who wants to protect their credit file.

Pros

Less hassle: You can apply for credit worry-free. Just answer a phone call to confirm your identity, and you’re all set.
Faster to set up: You only need to contact one credit bureau; that bureau is required to inform the other two.
Extra credit report: An extended fraud alert gives you an extra free credit report each year, for a total of six annually.
Less junk mail: Extended and active duty alerts remove you from pre-approved mailing lists automatically.

Most secure: A credit freeze completely seals your credit history, making it one of the most secure protections against fraud.
No renewals: A freeze lasts indefinitely. You won’t need to renew it.
Available to anyone: Extended and active duty fraud alerts require proof of identity theft or military duty, respectively. But anyone can set up a credit freeze.

Cons

Less secure: An alert makes it harder for someone to apply for credit under your name, but not impossible. Credit issuers aren’t required by law to verify. And a motivated thief can hijack your phone’s SIM — and then answer calls posing as you.
Slower credit approval: You’ll need to confirm your identity before each credit check.
Expiration date: You’ll need to renew a fraud alert every year, or every seven years for extended alerts.

Blocks all credit: A freeze rejects even valid credit checks, like for a car loan or new job. You’ll need to temporarily lift the freeze each time.
Need to contact all bureaus: You’ll need to add and remove freezes with each credit bureau separately.
No expiration date: If you no longer want a fraud alert, it will disappear on its own. If you don’t want a credit freeze anymore, you must call all three bureaus.

Note: Neither a fraud alert or a credit freeze can stop scammers from using or taking over your current accounts.

If scammers have access to your credit card numbers, bank account, or other sensitive financial information, you should consider a credit monitoring service.

How Do Fraud Alerts Work?

A fraud alert flags your credit report and recommends that lenders verify your identity before issuing new lines of credit. In most cases, this means you’ll receive a phone call confirming any new accounts or loans.

Here’s what happens if you have a fraud alert in place:

If an inquiry is made into your credit history: You’ll get a call from a lender confirming your identity. Only after you agree will the lender process an application for a new credit account.
If someone tries to take out loans or open new accounts: You should get a call to authorize new accounts that you didn’t request. You can deny the request and protect yourself from the attempted identity theft.

Fraud alerts are free and have no impact on your credit report or credit scores. You can still request your free annual credit report if you have a fraud alert set up.

⚠️ Take action: If you think you’ve been the victim of fraud, your bank account, email, and identity could also be at risk. Try Aura’s identity theft protection free for 14 days.

Types of Fraud Alerts: Initial, Extended, and Active Duty

There are three different types of fraud alerts you can request, depending on your needs:

1. Initial fraud alert

Anyone who suspects fraud can set up an initial fraud alert. It lasts for one year, and you can renew it every year thereafter. For an initial fraud alert, you’ll need to present documents to prove your identity and current mailing address.

An initial fraud alert requests lenders confirm your identity, but it doesn’t offer any other benefits.

‍Who it’s for: People who suspect their identity has been stolen. ‍
How long does it last? 1 year (can be renewed).

2. Extended fraud alert

If you’ve been a victim of identity theft, you can set up an extended fraud alert. It lasts for seven years and can be renewed indefinitely. In addition to documents proving your identity and mailing address, you’ll need to present an official identity theft report.

Bureaus will accept either a report filed with the Federal Trade Commission (FTC) at IdentityTheft.gov or a police report. We recommend filing both.

On top of confirming your identity for new credit, an extended alert removes you from prescreened credit card and insurance offers for the first five years of the alert.

You also get access to an extra free credit report from each major credit bureau each year, as well as the one you’re entitled to by law.

‍Who it’s for: Anyone who has been the victim of identity theft.‍
How long does it last? 7 years (can be renewed).

3. Active duty alert

Service members on active duty can request a fraud alert that lasts for one year and can be renewed each year for the length of their deployment. To request an active duty alert, you don’t need to be a victim of identity theft. However, you will have to provide your military ID alongside other identity documents.

In addition to verifying your identity for each new credit request, an active duty alert also removes you from pre-screened offers for two years.

‍Who it’s for: Active duty service members on deployment. ‍
How long does it last? 1 year (can be renewed).

How To Set Up a Fraud Alert

Setting up a fraud alert is simple and should take less than 30 minutes.

First, contact one of the three credit bureaus (Equifax, Experian, or TransUnion) and request a fraud alert. You’ll need to supply documentation to prove your identity and situation, such as:

Government-issued ID (Driver’s license, birth certificate, Social Security card, etc.)
Utility bill, phone bill, or bank statement showing your name and address
Pay stub, W2, or 1099 with your Social Security number (SSN)
For an extended fraud alert: FTC Identity Theft report and/or police report
For an active duty alert: Military ID

Here’s how to contact the credit bureaus:

Equifax: 800-685-1111
Experian: 888-EXPERIAN (888-397-3742)
TransUnion: 888-909-8872

How To Renew or Cancel a Fraud Alert

There’s no harm in leaving a fraud alert in place for its full duration. However, you can still cancel or renew an alert before it automatically expires:

How to renew a fraud alert: Contact one of the credit bureaus and request that they renew your fraud alert. You’ll be required to submit eligibility documents again for extended and active duty alerts.
How to cancel a fraud alert: Contact each credit bureau individually and request that they lift the fraud alert. If you created a fraud alert because your data was compromised, you’ll likely still be at risk after the alert expires. That’s why it’s a good idea to renew an alert once you’ve set it up.

💯 Did you know? Blocking electronic access and using the Department of Homeland Security’s (DHS) “myE-Verify” Self Lock are two ways to specifically restrict access to your SSN.

What Is a Credit Freeze?

A credit freeze — also called a security freeze — prevents lenders from accessing your credit report. In essence, this will stop scammers from being able to open new accounts in your name as lenders won’t be able to check your credit file.

A credit freeze offers stronger protection for your credit report, but also blocks credit applications that you authorize. It also won’t affect your credit history or credit score, and you can still review your report if it’s frozen.

Credit freeze vs. credit lock:

Credit freezes are mandated by federal law and required to be free, while credit locks are programs created by reporting bureaus. Credit locks also freeze your credit, but you are charged a monthly fee for faster service.

You can actively monitor your credit file for signs of fraud or see if someone is trying to take out loans in your name. For a free copy of your credit report, visit: AnnualCreditReport.com.

How To Set up a Credit Freeze

Contact Equifax, Experian, and TransUnion separately and provide proof of identity, such as an official ID, proof of your Social Security number, and proof of your current address.

Anyone can set up a freeze, and it doesn’t require an official identity theft report.

Adults or guardians can set up a credit freeze for a minor (up to age 16) or incapacitated adult in their charge.

Typically, you’ll need to provide the child’s birth certificate, Social Security card, and proof of your legal guardianship. Minors who are 16 or 17 years old must set up credit freezes themselves.

How To Unfreeze Your Credit File

There are two options if you want to remove a credit freeze:

A temporary “thaw” of a few days: For example, if you want to apply for a new credit card.
A permanent “unfreeze”: For example, if you don’t want to go through the hassle of freezing and unfreezing your credit.

Both options require you to contact each of the credit reporting agencies separately. By law, the bureaus are required to lift the freeze within one hour of your request (and within three business days if you request the lift by mail).

Can you enable a credit freeze and a fraud alert?

It’s technically possible to set up a fraud alert and then freeze your credit, however it’s redundant and doesn’t add any additional security.

Instead, a better option would be to sign up for an identity theft protection service that offers three-bureau credit monitoring. This way, you’ll get alerted in near real-time of any suspicious activity on your credit file, bank account, personal information, and more.

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When To Choose a Fraud Alert

You may actively apply for credit soon. If you’re planning on getting a car loan, mortgage, or new credit card in the next few months, a fraud alert may be the best choice.
You’re planning on changing jobs, houses, or banks. Employers, landlords, insurance companies, banks, and other service providers can also review your history. If you’re going to get a new job or apply for insurance, a fraud alert might be better than a credit freeze.
You’re looking for a balance of protection and convenience. For the average consumer, a fraud alert offers peace of mind with less hassle. If you just want “set it and forget it” fraud protection, this may be the best option.
You’re on active duty in the military. Identity thieves often target people known to be out of the country. Anyone on deployment should set up an active military fraud alert.

When To Choose a Credit Freeze

You’ve confirmed you’re a victim of fraud. If you know your identity has been stolen in the past or that your sensitive information was leaked in a data breach, a credit freeze can help block future attempts to defraud you.
You’re close to retirement. If you have few reasons to request new credit, a credit freeze is a great tool to protect your credit score.
You want to protect your children. Although the results can be unsettling, it’s always a good test to request a credit report for your child. If one exists, it’s most likely because your child has been a victim of child identity theft. You should immediately freeze any credit reports in your children’s names that you find.
You want the best security. The absolute best way to protect your credit report from identity thieves is to set up a credit freeze.

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