Credit Freeze vs Fraud Alert: How to Set Up Both at Equifax, Experian and TransUnion

A credit freeze and a fraud alert are the two strongest free tools you have against new account fraud, where someone opens a credit card or loan in your name. Neither one requires a paid service, and you can use both at the same time. This guide explains the difference and how to set each one up, based on guidance from the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB).

The short comparison

Source: FTC Consumer Advice: Credit Freezes and Fraud Alerts.

How a credit freeze works

When a lender checks your credit before approving a new account, a freeze makes that check fail. Without a report, most lenders will not approve the application, so a thief using your Social Security number has a much harder time. The FTC notes that a freeze does not affect your credit score, and you do not have to wait for a breach to place one.

A freeze does not stop everything. It does not affect accounts you already have, so you should still watch your bank and card statements. It also does not stop someone from misusing an existing card number, filing a tax return in your name or using your information for medical services. Those risks are covered in our guide to signs of identity theft.

How to freeze your credit at all three bureaus

1. Set aside 20 to 30 minutes. You will verify your identity with each bureau, usually with your Social Security number, date of birth and address history. That is normal when you are dealing with the bureau directly on its own website or phone line.
2. Equifax: go to Equifax and choose the security freeze option.
3. Experian: go to Experian and choose the security freeze option.
4. TransUnion: go to TransUnion and choose the credit freeze option.
5. Save your login details or PIN for each bureau in your password manager. You will need them to lift the freeze later.

You can also find each bureau's phone number and mailing address on IdentityTheft.gov. Type the bureau addresses yourself rather than clicking links in emails or ads that claim to be from a bureau.

Lifting a freeze when you apply for credit

When you apply for a mortgage, car loan, credit card, apartment or some jobs, you will need to lift the freeze so the company can check your credit. The FTC suggests asking which bureau the company will use, lifting the freeze at just that bureau, and putting it back once the check is done. Bureaus let you lift a freeze for a set period or until you turn it back on.

How a fraud alert works

A fraud alert does not block your report. Instead, it tells businesses that check your credit to take extra steps, usually contacting you, before they open a new account. It is quicker to set up than a freeze because you only contact one bureau, and that bureau must notify the other two.

An initial fraud alert lasts one year and you can renew it. Placing one also lets you get a free copy of your credit report from each bureau. If you have already been a victim of identity theft and have an FTC identity theft report from IdentityTheft.gov or a police report, you can request an extended fraud alert, which lasts seven years.

Which one should you choose?

• You just want strong protection and rarely apply for credit: a freeze at all three bureaus. It is the stronger tool.
• You are about to apply for credit, or you want something quick right now: an initial fraud alert today, then a freeze when you have time.
• You are already a victim of identity theft: file a report at IdentityTheft.gov, then consider a freeze plus an extended fraud alert.

The CFPB's explainer, What is a credit freeze?, covers the same choice from the consumer finance side.

What about a "credit lock"?

A credit lock is a product offered by credit bureaus, often bundled into apps or paid identity protection plans. It has a similar effect to a freeze, and its main appeal is convenience: you can usually turn it on and off with one tap. The key difference is that a freeze is free by law and its rules are set by federal law, while a lock's terms are set by the company that offers it. If you are considering a paid plan mainly for the lock, remember that a free freeze does most of the same job. We cover this tradeoff in free vs paid monitoring.

Freezing a child's credit

The FTC says parents can request a free credit freeze for a child under 16. The process is different from an adult freeze and each bureau has its own instructions, linked from the FTC page in the sources below. Children rarely need credit, so a freeze on a child's file has very little downside.

Keep checking your reports

A freeze or alert works best alongside regular checks. You can get your credit report from each bureau for free every week at AnnualCreditReport.com. Look for accounts, inquiries or addresses you do not recognize, and dispute anything wrong directly with the bureau.