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07/06/22

How To Use Credit Freezes & Fraud Alerts

In a world where fraud and identity theft run rampant and methods for protecting your credit file are many, it’s important to understand what methods of protection you have available and what they offer to you.

Employing a credit freeze and fraud alerts are protective measures that are meant to help stop criminals from opening fraudulent credit accounts in your name. So, let’s dive into what exactly they are and why you may want to utilize them.

What is a credit freeze?

A credit freeze, also known as a security freeze, stops companies (creditors, lenders, credit card companies, lease agencies, etc.) from viewing your credit report. Placing a credit freeze is free to do, and it does not affect your credit score. Credit freezes remain in place until you lift them. For a company to view your credit report while a credit freeze is in place, you would have to temporarily lift the credit freeze.

What is a fraud alert?

When you apply for a new account, a fraud alert notifies lenders to call you to verify your identity before extending new credit. Fraud alerts are free, and best of all, when you place a fraud alert with one credit bureau, they communicate the fraud alert to the other two bureaus for you. 

There are two types of fraud alerts: initial fraud alert and extended fraud alert. 

  1. Initial fraud alert- this type of alert stays on your credit report for one year, unless you remove it before the year is over. This type of alert is typically added if you are (or think you are at risk to become) a victim of fraud or identity theft.
  2. Extended fraud alert- this type of alert can be requested if you have a police report that verifies that you are a victim of identity theft. This type of alert stays on your credit report for 7 years, unless you remove it.  

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

A credit freeze blocks companies from accessing your credit report, whereas fraud alerts do not stop lenders from accessing your credit report, but rather notifies lenders (via your credit report) to verify your identity by calling you before opening a new account.

Should I request a credit freeze or fraud alerts?

In the first quarter of 2022, there were 118,191 Credit Card Fraud reports, making it the #1 most reported type of Identity Theft. ¹ How is this related? By placing a credit freeze, you are taking an extra step to thwart criminals from opening fraudulent accounts in your name, and by adding a fraud alert, creditors verify your identity before extending credit.

Last year, there were 1,862 data breaches, up 68% from the year prior. ² How is this related? Data breaches leak personal information into the hands of cybercriminals, which equips them to open fraudulent account in your name.

Each person has a unique situation, but here are a few reasons why you may want to request a credit freeze or place fraud alerts on your credit files:

  • You are (or have been) a victim of identity theft
  • Your information was found in a data breach
  • Personally identifiable information was stolen (like your SSN, Driver’s License, etc.)
  • You want to be proactive in protecting your credit

Keep in mind, a credit freeze and fraud alerts do not guarantee that the opening of fraudulent accounts will not take place. However, many companies do rely on credit report information to help guide them in their approval processes. In addition, fraud alerts provide you with an extra layer of protection.

Which bureaus should I place a credit freeze with?

If you feel like a credit freeze is right for you, it is recommended that you place a credit freeze with all three credit bureaus: Experian, Equifax, and TransUnion. 

Already an IDSeal subscriber? We can help!

For members, IDSeal’s 24/7 Recovery Service & U.S. Based Restoration Service will assist with placing a credit freeze at our customer’s request for their Experian file. To place a freeze with Equifax or TransUnion, customers should contact them directly. Please note: IDSeal is not able to contact Equifax or TransUnion on our customers behalf since each bureau requires separate pin numbers to remove a credit freeze, which must be placed by a customer. 

If a customer who placed a credit freeze through Experian would like to remove it, they will need to call our toll free number or visit https://www.experian.com/ncaconline/freezepin

How do I place a Credit Freeze? 

When placing a credit freeze, be sure to have your SSN, DOB, Address, and other personal information available. At any time, you can lift or remove your credit freeze. Lifting a credit freeze is temporary and done generally if you need to apply for credit, while removing the credit freeze is permanent. 

How do I place a fraud alert?

Remember, when placing a fraud alert, you only have to contact one credit bureau. If you are an IDSeal member, our 24/7 Recovery Service & U.S. Based Restoration Service can help you place, extend, or remove a fraud alert. Adding a fraud alert with IDSeal will alert Experian, and subsequently Equifax and TransUnion.

¹https://public.tableau.com/app/profile/federal.trade.commission/viz/TheBigViewAllSentinelReports/TopReports

² https://iapp.org/news/a/record-number-of-data-breaches-in-2021/

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