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

Credit card with padlock and identity theft warningIn 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, a credit lock, fraud alerts, and ongoing monitoring of your personal information. Here’s how each works.

Creating a Security Freeze

Each of the three major credit bureaus, TransUnion, Equifax, and Experian, allow consumers to place 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 freeze is helpful in the fight against identity theft because no new accounts that involve a credit check, like a new auto loan, mortgage, or credit card, can be approved. Each credit bureau has a process for establishing a security freeze as well as procedures for unfreezing an account when new credit is needed.

Using a 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 service offered by each of the three major credit bureaus that is completed online. The lock is in place 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 a PIN to unfreeze as well as verification of identity. With a credit lock, your password is all that’s needed to unlock your credit report and allow creditors access. Through all three credit bureaus, the credit lock features is a subscription-based offering, meaning it is available for as long as the 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.

Setting up Fraud Alerts

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. A fraud alert can be easily placed on your credit report through a simple online process with each of the credit bureaus. An initial fraud alert lasts for 90 days, but there is an extended fraud alert option that can last for seven 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.

Paying for a service to monitor your credit is another smart way to protect yourself from identity theft and fraud. Through Lifelock for instance, you have 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, Lifelock then works to stop any fraudulent account opening before it becomes a major problem.

Using a security freeze, credit 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 difference between each security solution at your disposal, and determine which is right for you based on your need for new credit and time frame.

Posted on November 6, 2017 by in Credit Monitoring

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