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Fraud Alerts and Credit Freezes

Jackie here. Fraud alerts and credit freezes are some of the tools available to you to better protect your credit. The Identity Theft Resource Center has quite a bit of information about this topic, and we’ve consolidated some of that information for you on our blog. Here’s what you need to know:

What Is a Fraud Alert?

A fraud alert is a warning to potential creditors that lets them know to take further steps to verify your identity before issuing credit. They are easy to place on your credit report and are the least restrictive of the two options. A fraud alert is a good protective measure to put in place if you’re worried about your identity and think you may be at risk for identity theft.

If you want to place a fraud alert on your credit report, contact any of the three credit reporting agencies (Equifax, Experian, or TransUnion) and request the alert. The agency you contact is required to inform the other two.

Potential Drawbacks

A fraud alert is an effective tool, but it is temporary, designed to protect you in the short term during times of increased risk for ID theft. Once in place, a fraud alert only lasts 90 days. If you need another one, you’ll have to call again. They can be renewed indefinitely, but you do have to manually do it yourself.

What Is a Credit Freeze?

If you’ve confirmed that you are a victim of ID theft, you can take the next step in protecting your identity: a credit freeze. This is more extreme than a fraud alert and keeps new lenders from seeing your credit (and thereby opening new loans). It doesn’t just stop thieves though, it will also keep you from opening new, legitimate, lines of credit. A credit freeze is a lasting solution and will remain in place until you ask to have it removed.

Potential Drawbacks

Getting a credit freeze is a bit more complicated than placing a fraud alert. You’ll need to contact each of the three credit bureaus yourself, verify your identity, and pay a fee (usually $5-10). This fee can often be waived by providing a copy of your police report that verifies ID theft has occurred.

If you do place a credit freeze, you’ll need to plan ahead, especially if you decide to get a new job, shop for a car, move into a new home or apartment, etc. Removing a freeze isn’t instantaneous and while it is in place, you’re frozen out of your credit too.

Could a fraud alert or credit freeze help you to protect your identity?

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