Credit Freeze vs. Fraud Alert: How Are They Different?

Whether you’ve already been the victim of identity theft or are just proactively protecting yourself from fraud, you’ve probably already heard about two tools designed to help protect your finances: a credit freeze and a fraud alert. Both options are powerful ways to protect your credit, but they each offer different levels of protection and are suited to different situations.

To help you figure out which option is right for you, we’ve put together this guide with the help of Torie Cullers, Risk and Fraud Manager here at Amplify Credit Union. Here’s what you need to know about credit freezes and fraud alerts, how each works, how to create them, and what to keep in mind.

What is a fraud alert?

Before deciding which of these options is best for you, it’s first important to fully understand what you’re comparing.

“A fraud alert is a notice placed on your credit report that tells lenders and creditors to take additional steps to verify your identity before extending any new lines of credit in your name,” Cullers explains. “A fraud alert doesn’t block access to your credit; it just adds an extra layer of awareness.”

So, how does a fraud alert work? Essentially, when a lender pulls your credit report to open a new account, the alert tells them to call you or confirm your identity in a different way to ensure you are the one making the request. This makes it much harder for a thief to take out a loan or a credit card with your personal information.

Types of Fraud Alerts

If you think you might need to place a fraud alert on your credit report, it’s important to know that there are three types.

• Initial fraud alert: This is the most common kind of fraud alert. An initial fraud alert lasts for a year and is a good first step if you think your personal information might have been compromised. For instance, you might consider an initial fraud alert if you know your information has been exposed in a data breach. You only have to sign up with one of the three major credit reporting agencies—Equifax, Experian, or TransUnion—as they’re required to notify the others.
• Extended fraud alert: If you’re certain you’re already the victim of identity theft and have filed an identity theft report, you can request an extended fraud alert. This type of alert lasts for seven years and provides more thorough protection. If you’ve implemented this type of fraud alert, lenders are required to contact you directly to ensure you are who you say you are before extending credit.
• Active-duty fraud alert: As you might guess, this type of fraud alert is specifically for military service members on active duty. This type of alert also lasts a year and helps protect your accounts while you’re deployed or unable to monitor your finances for any reason.

How to Place a Fraud Alert

Placing a fraud alert is simple and free:

1. Contact one of the major reporting agencies: Equifax, Experian, or TransUnion. This can be done online, by phone, or via mail.
2. The agency you contact is legally required to notify the other two. Only one call or submission is necessary.
3. If you’re placing an initial fraud alert, you don’t need any documentation.
4. For an extended fraud alert, you must submit an identity theft report, filed with the FTC through IdentityTheft.gov or with your local law enforcement.
5. For an active-duty fraud alert, you need to provide proof of your military status. Keep in mind that an initial or active-duty fraud alert expires after one year. If you still want protection after that, you’ll need to request it again. It doesn’t renew automatically.

Once you place a fraud alert, each bureau will send you a confirmation. Keep records of your confirmation in case you need to follow up.

What is a credit freeze?

“A credit freeze goes a step further than a fraud alert,” says Cullers. “When you freeze your credit, your credit report is entirely locked. This prevents major credit reporting agencies from releasing your credit report to new creditors. Since lenders usually need to access that report to open a new account in your name, a freeze stops most new credit activity completely.”

It’s important to note, however, that a credit freeze does not impact your credit score. It also doesn’t prevent you from accessing your credit report yourself. Instead, a credit freeze makes it almost impossible for anyone else to open an account in your name without your knowledge.

You may also come across “credit lock” products sold by the bureaus or bundled into apps. While they feel similar to a freeze, a credit freeze is a right guaranteed free under federal law (FCRA), while a lock is a separate consumer product that isn’t always backed by the same legal protections.

How to Place a Credit Freeze

Unlike a fraud alert, you have to place a credit freeze with each credit bureau separately. Here are the steps to follow:

• Contact all three major credit reporting agencies separately, either by website or telephone.
  1. Equifax: equifax.com or 1-800-349-9960
  2. Experian: experian.com or 1-888-397-3742
  3. TransUnion: transunion.com or 1-888-909-8872
• Create an account with each agency or verify your identity. Each credit agency will ask for personal information such as your Social Security number, date of birth, and address history in order to confirm your identity.
• Request the freeze. Once the freeze is confirmed, it goes into effect within one business day if you’ve requested the freeze online or by phone.
• Save your PIN or account credentials. You need these to temporarily lift or permanently remove the freeze when you want to apply for new credit.

“While the process to freeze your credit requires a bit more legwork,” Cullers reminds. “It is also free to remove or lift it.”

Be cautious of scammers posing as a credit bureau and asking you to “verify” your PIN or account credentials. Only use the official bureau websites and phone numbers listed above, never a link or number from an unsolicited call or text.

Credit Freeze vs. Fraud Alert: Which Is Best for You?

	Fraud Alert	Credit Freeze
Impact on access to credit	Adds a warning; lenders must verify your identity	Blocks access completely
Duration	1 year (initial), 7 years (extended), 1 year (active duty)	Indefinite, until you decide to remove it
How to place it	One bureau notifies the others	Must contact each credit bureau separately
Cost	Free	Free
Best for	Suspected risk or identity theft	Maximum protection or confirmed theft

Still not sure which one is best for you? Cullers offers this advice.

“If you’ve been notified that you were the victim of a data breach or just want an extra layer of protection, an initial fraud alert is a great place to start. It’s easy to request and doesn’t require ongoing maintenance,” she says. “If you want maximum protection, freezing your credit is the stronger choice. While it does require more time to set up, it offers the most comprehensive level of defense.”

Cullers reminds folks that both can be used at the same time for even more protection. When both are in use, lenders must still verify your identity if your freeze is ever lifted.

Keep in mind that neither tool protects accounts you already have open. A freeze or alert only blocks new credit from being opened in your name, so it’s still important to keep an eye on your existing statements for any suspicious activity.

Final Thoughts

Understanding the difference between a fraud alert and a credit freeze is a key step in protecting your financial well-being. Both are free, easy to access, and effective. It’s just a matter of knowing which fits your situation best. If you’re dealing with suspected fraud, recovering from identity theft, or just being proactive, the major credit reporting agencies allow you to protect yourself in just a few steps. It’s worth taking the time to explore your options so you can act quickly when needed. Your financial future is worth protecting.