Consumers can protect themselves from identity theft and fraud in many different ways. One way is by setting up a credit freeze or a fraud alert. Both these methods can also act as a prevention from misuse of your information. It’s important to remember that in order to establish either one of these methods, there is no cost.
Credit Freeze
Credit freezes restrict access to your credit report, which means that no one, including yourself, would be able to open a new credit account under your name, as long as the credit freeze is in place.1 You can choose to do this by ensuring that no one can open any unauthorized account under your name. If you want to apply for a new credit account in the future, just make sure to remember to lift the credit freeze. In order to place a credit freeze, you must contact each of the credit bureaus to set it up. Thus, if you want to remove the credit freeze, you must contact each of the credit bureaus to do so.
Fraud Alerts
On the other hand, fraud alerts provide another step when applying for a new credit account. Placing a fraud alert makes it harder for someone to open a new account under your name because the business where you are trying to open a new credit account, must verify your identity before opening a new account in your name. Sometimes this requirement is met by calling you to confirm you are the one trying to open the new account.2 With fraud alerts, you can contact any one of the three credit bureaus to set it up. Once you contact one of the credit bureaus, that credit bureau will let the other two know. However, keep in mind that a fraud alert only lasts for one year and you must renew it, if you still want it in place after that.
If you have been a victim of identity theft, you can request an extended fraud alert that lasts seven years. You must complete an FTC identity theft report at IdentityTheft.gov or file a police report in order to request an extended fraud alert. In order to set this up, you can contact one of the three credit bureaus and that credit bureau will contact the other two.
1 https://consumer.ftc.gov/articles/what-know-about-credit-freezes-fraud-alerts
2 https://consumer.ftc.gov/consumer-alerts/2020/02/fraud-alerts-credit-freezes-whats-difference