Credit Freeze vs. Fraud Alert: What's the Difference and Which Should You Use?

Short answer: In the credit freeze vs. fraud alert choice, both are free and both help stop identity thieves from opening accounts in your name. A credit freeze blocks access to your credit report, so no one, including you, can open new credit until you lift it. A fraud alert keeps your report open but tells lenders to verify your identity before they approve new credit. A freeze is the stronger block; a fraud alert is easier if you plan to apply for credit soon.

What Is the Difference Between a Credit Freeze and a Fraud Alert?

Both tools work through the three nationwide credit bureaus: Equifax, Experian and TransUnion. The main difference is what a lender can do when someone applies for credit in your name.

	Credit freeze	Fraud alert
Cost	Free	Free
What it does	Lenders can't see your credit report, so they can't approve new accounts, whether the application is fraudulent or legitimate	Lenders can still see your report, but must verify your identity before opening new credit
How to place it	Contact each of the three bureaus separately	Contact any one bureau; it must notify the other two
How long it lasts	Until you lift it	One year (initial alert), renewable; seven years (extended alert)
Who can get one	Anyone, even without identity theft	Anyone who is, or suspects they may be, affected by identity theft (initial alert); identity theft victims (extended alert)

Sources: FTC, CFPB and USAGov (see the list below).

How Does a Credit Freeze Work?

A credit freeze, also called a security freeze, restricts access to your credit report. USAGov explains that because creditors can't access your report, they can't approve new accounts, whether the application is fraudulent or legitimate. The FTC notes that this includes you: no one can open a new account until you lift the freeze.

Key rules, according to the CFPB and USAGov:

• It's free to place and to lift at all three bureaus. The CFPB says you have a right to it by law.
• You contact each bureau separately, online, by phone or by mail. The FTC says the freeze lasts until you lift it and that you'll usually get a PIN or password.
• It doesn't affect your score. The FTC says a freeze doesn't affect your credit score.
• It's fast. A bureau must place the freeze within one business day when you ask by phone or online, or within three business days by mail.
• Lifting is faster. A bureau must lift a freeze within one hour of a phone or online request, or within three business days of a mail request. You can lift it for a period you choose or remove it permanently.

When you apply for a loan, an apartment or a job, the FTC suggests asking which bureau the company will check and lifting the freeze only at that bureau.

How to Freeze Your Credit

You can freeze your credit online, by phone or by mail at each bureau:

1. Go to each bureau's freeze page. The FTC links to the credit services pages for Equifax, Experian and TransUnion.
2. Follow the bureau's steps online, by phone or by mail.
3. Keep your PIN or password somewhere safe so you can lift the freeze later.
4. Repeat at the other two bureaus. The FTC says to contact all three to place a freeze.

You don't need to buy anything to freeze your credit. The CFPB says credit locks, which are often bundled with paid services, are no more effective than security freezes, which are free.

What Does a Credit Freeze Not Block?

A freeze is aimed at new credit. According to the CFPB, some companies and agencies can still see your report while it's frozen:

• Creditors you already have accounts with
• Certain government agencies, such as child support agencies
• Companies you've hired to monitor your credit file

The CFPB also says the free-freeze law doesn't apply to someone who requests your credit report for employment, tenant screening or insurance purposes.

A freeze also doesn't change what's already on your report. If you find accounts you don't recognize, or other mistakes, you can dispute them for free. Our guide to disputing credit report errors walks through the steps.

How Does a Fraud Alert Work?

A fraud alert is a note on your credit file. The CFPB says that when it's in place, a creditor must take steps to verify your identity before opening a new account, issuing an additional card or raising the limit on an existing account at your request. The FTC notes that a fraud alert doesn't stop businesses from seeing your credit report.

There are three kinds, according to the FTC:

1. Initial fraud alert. Free. Lasts one year, and you can renew it. For anyone who is, or suspects they may be, affected by identity theft.
2. Extended fraud alert. Free, for identity theft victims. Lasts seven years. You'll need an FTC identity theft report or a police report. It also removes you from lists for unsolicited credit and insurance offers for five years.
3. Active-duty alert. Free, for service members on active duty. Lasts one year and can be renewed for the length of your deployment. It removes you from marketing lists for two years.

To place any of these, contact one bureau. The FTC says that bureau must tell the other two.

Which Should You Choose: Credit Freeze or Fraud Alert?

The FTC says freezes are generally best for people who aren't planning to take out new credit, and gives older adults, people under guardianship and children as examples. A fraud alert lets you keep access to credit while adding a check.

Here's a simple way to think about it:

• Choose a freeze if you don't expect to apply for a loan, credit card or other new account soon and want the strongest block.
• Choose a fraud alert if you're about to apply for credit, such as a mortgage or car loan, and would rather not lift freezes at three bureaus.

If you're working to rebuild your credit and plan to apply for something new, such as a secured card, remember to lift the freeze at the bureau the lender will check before you apply.

Can You Freeze a Child's Credit?

Yes. The FTC says you can request a free credit freeze for a child under 16, and it stays in place until you tell the bureaus to remove it. The CFPB says the same protection covers incapacitated people and people with a guardian, and that a parent or guardian can make the request. If the person has no credit file, the bureau will create one that can't be used for credit purposes.

The Bottom Line

A credit freeze and a fraud alert are both free. A freeze is the stronger protection: it blocks new credit in your name, including your own applications, until you lift it, and it doesn't affect your credit score. A fraud alert is lighter: it keeps your report open but makes lenders verify it's really you. If you don't need new credit soon, a freeze at all three bureaus gives you the broadest block. Then keep an eye on your reports, and if you spot an account that isn't yours, dispute it and see our guide to removing collections from your credit report for what can and can't come off.

Frequently asked questions

Is a credit freeze or a fraud alert better?

It depends on whether you plan to apply for credit soon. The FTC says freezes are generally best for people who aren't planning to take out new credit, while a fraud alert lets you keep access to credit. A freeze is the stronger block, because no one, including you, can open new accounts until you lift it.

Does freezing your credit hurt your credit score?

No. The FTC says a freeze doesn't affect your credit score, and the CFPB says freezes don't affect your credit scores.

How long does a fraud alert last?

An initial fraud alert lasts one year and can be renewed. An extended fraud alert, available to identity theft victims, lasts seven years. An active-duty alert for service members lasts one year and can be renewed for the length of a deployment.

How fast can I lift a credit freeze?

Under the law described by the CFPB, a bureau must lift a freeze within one hour when you ask by phone or online, and within three business days when you ask by mail. You can lift it for a set period or remove it entirely.

Can I freeze my child's credit?

Yes. The FTC says you can request a free credit freeze for a child under 16. The CFPB says that if the child has no credit file, the bureau will create one that can't be used for credit purposes.

Sources

1. FTC: Credit Freezes and Fraud Alerts
2. CFPB: What Is a Credit Freeze or Security Freeze on My Credit Report?
3. USAGov: How to Place or Lift a Security Freeze on Your Credit Report
4. FTC Consumer Alert: Fraud Alerts and Credit Freezes, What's the Difference?

This guide is general information, not personal advice. Your situation may differ, so consider talking with a qualified professional, such as a fiduciary financial adviser, CPA or licensed agent, before making a decision.