Fraud Alerts vs Credit Freeze – What You Should Know

Credit applications must be scrutinized more closely in the event of a fraud notice. Freezes are intended to prevent the opening of new credit accounts.

In this article, I will be explaining the differences and similarities between fraud alerts vs credit freeze and what you should know about these two terms.

While both a fraud alert and a credit freeze can assist protect identity theft and fraud, they are not the same.

A fraud warning merely asks creditors to verify your identity before extending new credit. A credit freeze prevents access to the accounting reports until you lift it, making it unlikely that new credit accounts will be started in your name without your permission.

Credit freezes and fraud warnings are both free. A credit fraud alert is easier to set up, but a credit freeze provides more security. Fraud alerts also expire after a certain period of time, whereas credit freezes persist until you lift them.

What is the Definition of a Fraud Alert?

A fraud alert is a notice on your credit report that warns possible lenders that they must contact you — usually by phone — to confirm your identity before issuing new credit. If anyone tries to open a new credit card or take loans in your name, you should be notified so you may take steps to close the account.

Individuals who wish to avoid having to freeze and unfreeze their credit while applying for credit can consider a fraud alert.

Credit fraud notifications are divided into three categories:

1. Fraud Alert – Consumers can receive a fraud alert, which is the most basic sort of warning. It has a one-year lifespan and is continuous. To get one, you do not even have to be a victim of fraud or identity theft.

2. An extended alert is valid for a period of 7 years. It’s exclusively for people who have been the victims of identity theft and have reported it to either identitytheft.gov or the police. Unless you ask to be kept on, credit bureaus will remove your name from marketing lists for access to finance offers for the next five years.

3. Active-duty fraud alert: This alert is intended for military personnel and lasts for a year. It can be renewed for the duration of the deployment.

Is it necessary for me to set up a Fraud Alert?

If your personal information has been compromised — and given the number of data breaches that have occurred, there’s a strong possibility it has — setting up a fraud alert can notify you if someone is attempting to register new accounts using your information.

Businesses must take precautions to ensure it’s truly you applying for credit in your name if you have a fraud alert on your credit record. Some consumers opt for a fraud alert as well as a credit freeze in case one of them fails.

How can I set up a Fraud Alert?

A fraud alert can be set up with a simple phone call or by going online. Just one of the three credit bureaus needs to be notified; the one you contact is mandated to inform the other two.

You’ll need the following contact information:

Equifax’s phone number is 800-685-1111.

Experian can be reached at 888-397-3742.

TransUnion can be reached at 888-909-8872.

Is it possible for me to remove a Fraud Alert?

A fraud alert could be lifted in the very same way it was placed: by calling one of the credit reporting agencies. Most fraud notifications are only valid for a year.

Should you desire that businesses accept credit applications in your name without checking that they’re legitimate. The removal of a fraud alert can make it much easier for anyone to apply for credit in your name without your awareness, increasing your risk of identity theft.

What is a Credit Freeze and how does it work?

A credit freeze, also known as a security freeze, stops creditors from viewing your credit report without your permission. While credit card issuers and lenders typically want to examine your credit record before authorizing a credit card or loan, if they can’t obtain your credit report, they’re unlikely to give new credit to you or anyone pretending to be you. The freeze will not be lifted or “thawed” until you use an encryption key credit bureau account or a PIN to lift or “thaw” it.

To put your credit on hold, you’ll need to contact each credit bureau individually.

You can unblock your credit and allow creditors to examine your credit report when you wish to start a new account. Since you’re renting an apartment or seeking for insurance, both of which normally involve a credit check, this step may be required. Your credit report can be unfrozen in minutes if you know your passcode.

Which Should I Choose: Fraud Alert vs. Credit Freeze?

It will not expire, but unlike fraud alert, so you won’t just have remember to renew it. If you intend to apply for credit, you will have to unblock your credit.

A fraud alert is a fantastic option if you would not want to have to worry about freezing and unfreezing your credit every time you apply.

Is It True That a Credit Freeze or Fraud Alert Can Lower My Credit Score?

The only thing a credit freeze does is limit who may look at your credit records. It has no bearing on your credit score or your ability to use credit.

A fraud alert is just an extra layer of protection; it has no bearing on your credit score. If you’ve a fraud alert, applying for credit is easier since you do not want to unfreeze your credit first.

You may still check your credit with either a credit card.

Is It Possible For Me To Get a Fraud Alert and a Credit Freeze?

A credit fraud alert can be added to a credit freeze. John Ulzheimer, a credit specialist, compares it to putting a safe inside a safe, but he does it.

Neither freeze or fraud alert, on the other hand, can detect or prevent fraudulent charges on an existing credit card account. It’s up to you to verify your statements for any charges you didn’t allow and set up account alerts to notify you whenever charges are made.

To minimize your risk, respond swiftly to fight fraudulent charges if you detect a problem.

We hope now you have been able to distinguish between Fraud Alerts vs Credit Freeze. Hope you enjoy reading our article? Click below for more readings.

Fraud Alerts vs Credit Freeze.