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What's the difference between a credit freeze and a fraud alert?

Sept. 28, 2022
7 min read
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We do a lot of things in the name of security. We lock our doors, give our accounts complicated passwords and track our checked luggage with AirTags.

But one thing we may overlook in our security efforts is our credit. And it’s not something we should ignore. It seems there are always new reports of data breaches, and chances are good that our credit information has been exposed by now.

Although it’s nearly impossible to completely safeguard your personal information these days, credit freezes and fraud alerts can provide you with extra layers of protection. However, they will not eliminate the threat, and invoking either will require additional action on your part if or when you decide to apply for a new line of credit, whether that’s a credit card or something like a home mortgage or auto loan.

With all that in mind, you might wonder: Is the inconvenience worth the extra effort? To help you answer that question, here are the differences between credit freezes and fraud alerts and how they affect applications for credit.

What is the difference between a credit freeze and a fraud alert?

A fraud alert is just that: an alert. It still allows you to open a line of credit, but it ensures that an extra security measure is taken.

A credit freeze is more intense. With a credit freeze in place, no one, including you, will be able to open a line of credit in your name until the credit freeze is lifted.

Related: How to check your credit score for free

What is a fraud alert?

A fraud alert is an alert on your credit record that requires creditors to take an additional step to validate your identity before approving you for a new line of credit.

When lenders request a copy of your credit report from Equifax, Experian or TransUnion, they will see the fraud alert. The alert informs lenders that they need to take extra steps to verify you are indeed the person who is applying for credit.

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Related: Credit cards that offer a pause button and when to use it

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Types of fraud alerts

There are three types of fraud alerts:

  • Temporary fraud alert: If you suspect you might be the victim of identity theft or your credit information might have been compromised, you can file a fraud alert that will apply for one year. (You can renew the alert for free.)
  • Extended fraud alert: This type of alert is available to those who have already had their identity stolen and have filed a report with the Federal Trade Commission via IdentityTheft.gov or made a police report. It remains on your credit reports for seven years. This also allows you to request a free copy of your credit report from each of the three main credit bureaus twice within one year from when you place the alert — effectively letting you review your credit report six times to make sure no further instances of fraud occur.
  • Active-duty military alert: If you’re serving in the military and are on active duty, you can protect your credit while you are away. This type of alert is good for a year and can be extended for the length of your deployment. What’s more, filing this type of fraud alert means the credit bureaus will take you off their marketing lists for unsolicited credit and insurance offers for two years unless requested otherwise.

How do I set a fraud alert?

Setting a fraud alert is a relatively low-effort way to add security to your credit. You simply need to contact one of the three major credit bureaus to set a fraud alert on your credit. Each one is required to notify the others of the fraud alert, so there is no need to contact more than one.

Related: How I learned that my credit card number was stolen

What is a credit freeze?

A credit freeze restricts access to your credit report. While your credit freeze is in effect, you will not be able to open a new credit account unless you temporarily lift (or “thaw”) the freeze. This extra step is inconvenient but will make it harder for a fraudster to attempt to open new lines of credit in your name.

Even if a freeze is in place, your current creditors and debt collectors as well as government agencies will be able to access your credit report, and you can still do things such as purchase an insurance policy, rent a new apartment or apply for a job without having to lift or remove the freeze.

A credit freeze will remain active until you lift it — either temporarily or permanently (sometimes called a “credit thaw”).

How do I freeze my credit?

Unlike fraud alerts, a credit freeze requires you to contact each of the credit bureaus individually:

Be prepared to provide identifying information, including your name, address, birth date and Social Security number. In some cases, you might need a photo ID or a piece of mail addressed to you at your current address.

How do I unfreeze my credit?

Before you apply for new credit, you must lift the credit freeze first or “thaw” your credit report. If you don’t lift your credit freeze, the card issuer or lender won’t be able to access your credit information when it processes your application, and, as a result, you’ll almost certainly be denied.

SHUTTERSTOCK

Because you don’t know which credit reporting agency a card issuer will use when you apply for new credit, you will likely need to lift your freeze with all three of them in advance. At the same time, you can also choose a temporary lift or a permanent lift.

If you choose a temporary lift, you can decide the length of time and whether you want to suspend the freeze for a certain range of dates. After those dates pass, the freeze then goes back into effect. This is a convenient way to lift your credit freeze when you need to and then have it automatically reset without you having to remember to do so.

If the freeze was put in place to protect you from identity theft and credit fraud, you should think long and hard before permanently removing the credit freeze.

Tip: If you applied for a credit card but forgot to lift your credit freeze, thaw your report and then call the reconsideration line. I made this mistake when I applied for a new Chase credit card a few years ago. Chase was able to reprocess my application once I thawed my report and then approved me for a new account with a great sign-up bonus.

Related: Why you might — or might not — want to invest in a credit-monitoring service

Bottom line

A credit freeze or a fraud alert can help protect you against someone fraudulently opening new credit accounts in your name. Still, you must remain vigilant with your existing credit accounts. For this reason, it’s important to check your three credit reports frequently and review them for errors. If you place a fraud alert, you have the right to request another free credit report from each of the credit reporting agencies.

Having credit protections in place requires some extra time if you want to apply for new credit. But keeping your credit safe from bad guys is worth the effort — especially if you think your personal information has ever been compromised.

Additional reporting by Emily Thompson.

Featured image by GETTY IMAGES
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
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10xEarn 10x total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards®.
5xEarn 5x total points on flights through Chase Ultimate Rewards®.
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    Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,200 toward travel when you redeem through Chase Ultimate Rewards®

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    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

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Why We Chose It

If you are looking to take your premium rewards to the highest level, this card is really a no brainer in our eyes. Chase's Ultimate Rewards make points easy to redeem, with a wide range of 10 airline and three hotel transfer partners and a friendly user interface. Despite the high annual fee, Chase is consistently adding new benefits to keep the card competitive in a fierce premium rewards field.

Pros

  • $300 annual travel credit as reimbursement for travel purchases charged to your card each account anniversary year
  • Access to Chase Ultimate Rewards hotel and airline travel partners
  • Unlimited 3x points on the broad category of travel and dining
  • 50% more value when you redeem your points for travel through Chase Ultimate Rewards®
  • Broad definitions for travel and dining bonus categories

Cons

  • Steep $550 annual fee
  • May not make sense for people that don't travel frequently
  • You must spend the $300 travel credit before earning 3x points for travel and dining
  • No automatic hotel elite status
  • Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,200 toward travel when you redeem through Chase Ultimate Rewards®
  • $300 Annual Travel Credit as reimbursement for travel purchases charged to your card each account anniversary year.
  • Earn 5x total points on flights and 10x total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards® immediately after the first $300 is spent on travel purchases annually. Earn 3x points on other travel and dining & 1 point per $1 spent on all other purchases
  • Get 50% more value when you redeem your points for travel through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,200 toward travel
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Access to 1,300+ airport lounges worldwide after an easy, one-time enrollment in Priority Pass™ Select and up to $100 application fee credit every four years for Global Entry, NEXUS, or TSA PreCheck®
  • Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more