Considering a fraud alert or credit freeze?
You don’t need to be an identity theft victim to use these – but it’s helpful to know depending upon your situation. If you’re not sure which is best for you, here are some things to think about.
The recent security breach at Equifax has left some 143 million consumers scrambling to understand the difference between fraud alerts and security freezes, and which works best in protecting their personal information.
If you’re a victim of the Equifax breach, don’t hesitate to use these options to safeguard your information. You can opt for one or both, depending on what’s right for your situation. Here’s how to choose between a freeze and a fraud alert, and the best way to protect your credit.
What do fraud alerts and credit freezes do? With a fraud alert, businesses must try to verify your identity before extending new credit. Usually that means calling to check if you’re at a particular store attempting to take out new credit. With a credit freeze, no one – including you – can access your credit report to open new accounts. You’ll get a PIN number to use each time you want to freeze and unfreeze your account to apply for new credit.
How long do fraud alerts and credit freezes last? A fraud alert lasts for 90 days. You can renew it but you’ll need to remind yourself or it will expire automatically. Identity theft victims are entitled to an extended fraud alert, which last seven years. In almost all states, a credit freeze lasts until you temporarily lift or permanently remove it. In a few states, it expires after seven years.
How much do they cost? Fraud alerts are free. Credit freezes may involve fees, based on state law. In most states, they’re free for identity theft victims. For non-victims, they cost about $5 to $10 each time you freeze or unfreeze your account with each credit reporting agency.
How do I place a fraud alert or credit freeze? To place a fraud alert, contact any one of the three major credit reporting agencies, either by phone or online. The one you contact is required to notify the other two. If you’re an identity theft victim placing an extended fraud alert, you’ll also need to mail or upload your Identity Theft Report which you can create at IdentityTheft.gov. To place a credit freeze, you must contact each of the three credit reporting agencies individually at their credit freeze portals.
Credit freezes may be a strong tool but they may not be for everyone. Consider the cost and hassle factor. If you’re about to take out new credit (apply for a mortgage, car loan, student loan), then you’ll have to unfreeze and refreeze each time you want new credit. But if you won’t need new credit soon, then a credit freeze may be for you.
For anyone who is in the middle of buying a home, or some other financial transaction, you may not want to block prospective lenders from seeing your credit file. If that’s the case, opting for a fraud alert may offer reasonable protection, because lenders will be warned and you’ll receive a free credit report from each bureau.
Still, a credit freeze is the stronger option. So if you can’t lock down your credit now, plan on doing so as soon as you can.
And for maximum protection, we recommend using both freezes and fraud alerts. As the Equifax breach showed, you can’t be too careful.
If you need further information, please contact us.