Fraud alert vs. credit freeze: What’s the difference?

Fraud alerts and credit freezes are two ways to help guard against identity theft and fraud, but they work in slightly different ways. 

A fraud alert requires creditors to take extra steps to verify your identity before issuing a new line of credit. A credit freeze, on the other hand, is more restrictive than a fraud alert and requires a few extra steps to complete. 

Choosing the one that’s right for you can depend on the situation. Keep reading to learn about your options.

Key takeaways

• Fraud alerts and credit freezes help prevent identity theft and other types of fraud.
• There are three different types of fraud alerts—initial, extended and active duty.
• Setting up a fraud alert at one of the three major credit bureaus will activate an alert at all three.
• Setting up a credit freeze requires contacting each of the three bureaus individually. 

A fraud alert is a type of protection placed on credit reports. According to the Consumer Financial Protection Bureau (CFPB), when a credit report contains a fraud alert, it requires creditors to take “reasonable steps” to confirm the identity of the borrower before granting any new loans or lines of credit. It’s an added layer of security to help prevent identity thieves from opening credit in someone else’s name.

There are three different types of fraud alerts, and some of them have specific requirements. 

• Initial fraud alert: A first level of protection, an initial—or temporary—fraud alert requires creditors to take reasonable steps to confirm your identity before issuing any new credit. This type of fraud alert can be used by anyone at any time and expires after one year. It can be extended after the year is up.
• Extended fraud alert: This is a longer-term alert for more serious situations. The CFPB and the Federal Trade Commission (FTC) say that extended fraud alerts are only for victims of identity theft. Individuals have to file a police report or an FTC identity theft report at identitytheft.gov to qualify for this type of fraud alert, which lasts for seven years. 
• Active-duty fraud alert: This type of alert is for people serving in the military. They last for one year but can be extended for the length of the service member’s deployment. Active-duty service members also get free credit monitoring from the three credit bureaus—but service members have to contact each bureau individually to set this up.

You can set up a fraud alert by contacting one of the three major credit bureaus—Experian®, Equifax® or TransUnion®. This can be done online, by phone or by mail. 

Once a fraud alert is set with one bureau, they will contact the other two bureaus to set up fraud alerts with them, too. 

To cancel a fraud alert, you must notify each bureau separately or let it expire. 

A fraud alert is an added layer of protection that doesn’t interfere with opening new credit. If you have a fraud alert set, you may choose to leave it active or extend it once it expires. 

Fraud alerts can also be updated by phone or mail.

A credit freeze—also known as a security freeze—restricts access entirely to an individual’s credit report. It’s a higher level of protection against fraud and identity theft than a fraud alert, but it also means that new credit can’t be issued in that name while the freeze is in effect. 

A credit freeze lasts indefinitely but can be lifted at any time. 

All three bureaus allow you to set up a credit freeze online. This lets you quickly unfreeze your account online as well. You can also contact the bureaus by phone or mail—and you might need to do it this way if you’re freezing someone else’s credit.

There may come a time when you need to unfreeze your credit. For example, when you’re applying for a credit card or renting an apartment that requires a credit check. A freeze can be lifted temporarily when applying for new credit. This is known as a credit thaw.

When choosing between a fraud alert and a credit freeze, your choice may depend on the situation and protections you’re looking for. 

According to the FTC, a fraud alert may be right for you if you’re worried your identity has been stolen. Fraud alerts are less restrictive and typically last for a shorter period of time than credit freezes. And because you only need to contact one of the bureaus to set up a fraud alert, they’re easier to activate.  

The FTC also notes that a credit freeze may be helpful if your identity has been stolen or if you were part of a data breach that compromised your personal information. A credit freeze will restrict access to your credit report and block new credit accounts from being opened in your name. But you’ll need to lift the freeze—or at least do a temporary credit thaw—when you submit a new credit application. 

Neither fraud alerts nor credit freezes affect credit scores. Fraud alerts let creditors know they need to take extra precautions when issuing new credit in that borrower’s name. 

A credit freeze restricts access entirely to an individual’s credit report so that no new lines of credit can be opened while the freeze is active. 

In theory, the two protections could be used together. But since a credit freeze would prevent any fraud alert from being seen by lenders or creditors, it may be more helpful to consider which protection is most effective for the situation at hand. 

Keep in mind that neither of these protections can prevent fraudulent charges on existing credit. So it’s important to check credit statements regularly and report any fraudulent charges.

Fraud and identity theft can happen. But knowing the available protections can help prevent them. 

Monitoring your credit is one way to help make sure your personal information stays safe. You can get free copies of your credit reports at AnnualCreditReport.com. 

You can also use CreditWise from Capital One to receive alerts and monitor changes to your credit report early to stay ahead of any signs of identity theft or fraudulent activity. It doesn’t hurt your credit scores, and it’s free for everyone, even if you’re not already a Capital One customer.