The Difference Between a Credit Lock, Security Freeze and Fraud Alert

In a world where security breaches of major companies are on the rise, it can be difficult to determine which identity theft measures are appropriate for specific circumstances. Checking your credit is one simple method to uncover identity theft, but it is reactive at best.

Finding a fraudulent account months or years after it was established and used may require significant time, effort, and money to resolve the problem – and your credit score and history could be severely damaged.

In order to protect yourself from credit mishaps that involve fraud, it is necessary to understand other steps you can take, including setting up a security freeze, applying a credit lock, placing a fraud alert, and ongoing monitoring of your personal information.

Here’s how each works.

Security Credit Freeze

Each of the three major credit bureaus, TransUnion, Equifax, and Experian, allow consumers to put a security freeze on their credit profile at any time. With a security freeze, individuals are able to shut down access to their credit reports for a period of time so that no one can access their specific credit information.

A security credit freeze is helpful in the fight against identity theft because no new accounts that involve a credit check, like a new auto loan, home mortgage, or credit card, can be approved.

Freezing your credit reports

Each credit bureau has a process for putting a security freeze on your credit report as well as procedures for temporarily lifting a freeze when new credit is needed, and removing a credit freeze altogether.

Credit Lock

You may also consider creating a credit lock when there are concerns about having your identity stolen or fraudulent accounts opened in your name. Unlike a security freeze, a credit lock is a pay-for service offered by each of the three major credit bureaus that is completed in a matter of seconds online.

Locking your credit reports

The lock is set until you unlock your credit by signing in and clicking a simple button. A security freeze offers more protection than a credit lock because it requires PIN to unfreeze it as well as verification of identity. With a credit lock, an online account and password is all that’s needed to unlock your credit report to allow creditors instant access.

A credit lock isn’t typically free

Through all three credit bureaus, the credit lock feature is a subscription-based offering, meaning it is available for as long as small monthly or annual fee is paid. However, sometimes a credit bureau will offer it for free. Just remember, locking your credit file with one credit bureau doesn’t also lock your file at the other two.

Fraud Alert

Fraud alerts are yet another way to get ahead of identity theft, but they differ from both a security freeze and a credit lock. With a fraud alert, a note is placed on your credit report that requires creditors viewing your report to contact you to verify your identity before any new account is established. This extra step may stave off any attempts to get a new credit account by bad actors who may have your personal information.

Placing a fraud alert on your credit report

A fraud alert can be easily placed on your credit report for free through a simple online process, over the phone, or by mail with each of the credit bureaus.

An initial fraud alert lasts for ninety days, but there is an extended fraud alert option that can last for seven years, and an active duty alert for service members which automatically expires after one year. The active duty alert also removes a military member’s name from pre-screened credit card and insurance offers for two years.

None of the credit bureaus charge for establishing a fraud alert as they do with a security freeze or a credit lock subscription, nor do you have to contact all three to establish one.

Removing a fraud alert from your credit reports

However, removing a fraud alert requires contacting each credit bureau individually or waiting for them to expire.

Credit Monitoring Services

Paying for a service to monitor your credit is another smart way to protect yourself from identity theft and fraud. By using a credit monitoring website or app you can get ongoing monitoring of threats to your personal information, like opening a new account or a change of address.

When these activities take place, you receive a simple text, call, or e-mail to alert you that something may not be right. If it wasn’t you, some companies works to stop any fraudulent account opening before it becomes a major problem.

Final Thoughts on a Security Freeze vs. Credit Lock vs. Fraud Alert

Using a security credit freeze, credit report lock, fraud alert, or personal information monitoring are smart ways to protect yourself from identity theft threats, and they are each more proactive than simply checking your credit every now and again.

Understand the differences between each security solution at your disposal and determine which is right for you based on your need for new credit and the ongoing identity theft threats we’re all facing today.