What To Know About Credit Freezes and Fraud Alerts (2024)

FAQs

What To Know About Credit Freezes and Fraud Alerts? ›

Quick Answer

NerdWallet recommends a credit freeze for most consumers, because it's the best protection available. Unlike a fraud alert, it won't expire, so you won't have to remember to extend it. But you will need to unfreeze your credit if you decide to apply for credit.

A freeze can give you a false sense of security — you may still be susceptible to credit fraud or other fraud involving your Social Security number. A credit freeze won't affect your current accounts, but if a thief steals the information on an existing account, your credit may be used without your permission.

System errors, file mixups, data breaches, or even identity theft may be why your credit is frozen without you initiating it. System errors, file mixups, data breaches, or even identity theft may be why your credit is frozen without you initiating it.

When you place a fraud alert on your credit report, you can get a free copy of your credit report from each of the three credit bureaus. Duration: A fraud alert lasts one year. After a year, you can renew it.

When freezing your credit to limit the processing of new credit applications, you must make a separate freeze request at each of the national credit bureaus (Experian, TransUnion and Equifax).

A credit lock lets you restrict and grant access to your credit reports essentially the same way a credit freeze does, but usually with extra features.

A freeze doesn't affect your credit score or prevent you from accessing your own credit report. Your accounts remain open, so it's a good idea to keep monitoring your bank and credit accounts for signs of fraud.

A common misconception is that a credit freeze means you can't use your current forms of credit, like a credit card. But your credit report isn't accessed when you purchase something with a credit card. So, freezing your credit file doesn't affect your ability to use your existing accounts.

A credit freeze, also known as a security freeze, is the best way to help prevent new accounts from being opened in your name. It's absolutely free to freeze, unfreeze and temporarily lift a freeze on your credit, and it won't affect your credit score.

Can you put a freeze on your social security number? ›

If you know your Social Security information has been compromised, you can request to Block Electronic Access. This is done by calling our National 800 number (Toll Free 1-800-772-1213 or at our TTY number at 1-800-325-0778).

Freezing your credit information goes a long way toward preventing identity theft. A freeze creates a block on your credit information until you unfreeze it. This powerful tool protects you from someone attempting to open new accounts in your name without your knowledge.

If you plan on applying for new accounts soon and you're worried that your identity is compromised, a fraud alert might be sufficient. Otherwise, a credit freeze can offer more security, but it comes with the downside of an extra step each time you want to apply for credit.

Fraud alerts encourage lenders and creditors to take extra steps to confirm your identity before issuing you credit. Security freezes and credit report locks are tools that can help restrict access to your credit report so that new credit accounts cannot be opened.

Five major things can raise or lower credit scores: your payment history, the amounts you owe, credit mix, new credit, and length of credit history. Not paying your bills on time or using most of your available credit are things that can lower your credit score.

Placing a fraud alert does not affect your credit scores. It alerts creditors that you may have been a victim of fraud and encourages them to take extra steps, such as contacting you at a phone number you provide, to verify your identity before extending credit in your name.

A credit freeze restricts access to your credit report. If you suspect your personal information or identity was stolen, placing a credit freeze can help protect you from fraud.

You will still be able to apply for credit with a fraud alert. A fraud alert does not prevent you from applying for or obtaining credit. Anyone who views your credit report will just be notified to take extra precautions to verify it's really you applying for credit.

Fraud alerts encourage lenders and creditors to take extra steps to verify your identity, such as contacting you by phone, before opening a new credit account in your name or making changes to existing accounts. This can make it harder for someone to open unauthorized accounts in your name.

Does a credit freeze prevent soft inquiries? Because a soft inquiry is not necessarily to open a new credit account, a credit freeze usually doesn't prevent soft inquiries. Certain companies (insurance providers, for example) can still look at your credit report, as can your existing creditors.