A credit freeze and a fraud alert protect against the same problem in different ways: someone trying to open credit in your name. Neither costs money, but setting up one is not the same as setting up the other.
A freeze restricts access to your credit report. Because lenders typically check that report before granting credit, blocking access can make it harder for an identity thief to open an account. It also means you may need to lift the freeze when you want to apply for credit yourself.
The Federal Trade Commission says anyone can place a freeze, even without a known data breach or identity theft. Placing it, temporarily lifting it and removing it are free, and a freeze does not lower your credit score.
The important administrative detail is that you must contact Equifax, Experian and TransUnion separately. Freezing a report at one of the three nationwide credit bureaus does not automatically freeze the other two.
A fraud alert works differently. It tells lenders to take steps to verify your identity before opening new credit in your name, but does not block them from seeing the report. For an initial fraud alert, you contact one of the three bureaus, which must notify the other two.
That initial alert is available to someone who is, or suspects they may be, affected by identity theft. It lasts one year and can be renewed. A freeze lasts until you lift it. The FTC says a person can have both in place.
A paid service is not required to get the legal protection of a free security freeze. The Consumer Financial Protection Bureau warns that credit bureaus also sell credit locks, sometimes bundled with other paid services. A lock is not a reason to assume the free freeze is unavailable.
Freezing a report does not make the information disappear. The CFPB says you can still request and review your own report. Existing creditors, certain government agencies and companies you have hired to monitor your credit can still have access.
That limit matters: a freeze is a barrier to new-account fraud, not a promise that an existing bank account, card or password is safe. Consumers still need to watch account activity and report unfamiliar transactions to the relevant company.
Someone applying for a loan can ask the lender which bureau it will use, then arrange a temporary lift with the necessary bureau or bureaus. The federal timing rules allow up to one business day to place a freeze requested online or by phone, and up to one hour to lift it through those channels. Requests by mail can take up to three business days after receipt.
The CFPB also notes that the federal freeze requirement does not apply to credit-report requests for employment, tenant screening or insurance. A freeze should not be treated as a universal block on every possible use of a credit report.
The FTC’s guide to freezes and fraud alerts explains the differences and links to the bureaus. The CFPB’s security-freeze guide sets out the access exceptions and timing rules. These are existing consumer protections, not a newly announced program.
JBizNews Desk | Washington
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