Data Facts Lending Solutions Blog

Fraud Alert and Credit Freeze: Which Do You Need?

by Jennifer Hamby

Sep 19, 2017 11:15:42 AM

credit_freeze.jpgIn light of the recent Equifax security breach, Data Facts is re-posting information on the mortgage lending services of fraud alerts and credit freezes.

 Approximately 15 million United States residents have their identities used fraudulently each year with financial losses totalling upwards of $50 billion.  On a case-by-case basis, that means approximately 7% of all adults have their identities misused with each instance resulting in approximately $3,500 in losses!!

These alarming statistics demonstrate identity theft may be the most frequent, costly and pervasive crime in the United States affecting your credit and your ability to qualify for financing.  Both Fraud Alerts and Security Freezes can help protect your credit. However, each has different purposes and uses. Find out which one works best for your needs.

Alert.jpgFraud Alerts and How They Work

Fraud Alerts are alerts for anyone looking at your credit file. They signal to credit grantors that you may have been a victim of suspicious activity. Fraud Alerts allow creditors to take extra steps to verify the legitimacy of new credit request, by contacting you via phone prior to the extension of new credit, or increasing a line of credit.

3 Main Types of Alerts and Length of Effectiveness:

  • Initial Fraud Alert: 90 days
  • Active Duty Alert: 1 year
  • Extended Fraud Alert: 7 years

You can place an Initial Fraud Alert on your credit file that is effective for 90 days if you believe that you may have been a victim of fraud or are at risk of being a victim. When you or someone else attempts to open a credit account in your name, increase the credit limit on an existing account, or obtain a new card on an existing account, the lender should takes steps to verify that you have authorized the request. When you place an Initial Fraud Alert on your credit report, you're entitled to order one free credit report from each of the three nationwide consumer reporting companies, and, if you ask, only the last four digits of your Social Security number will appear on your credit reports.

You may be eligible to place Military/Active Duty Alert if you have been called to active duty military service away from your usual duty post. This type of alert is similar to the Initial Fraud Alert, except that it will remain on your file for 12 months, and in addition, removes your name from pre-screened offers of credit for 2 years.

If you discover evidence of fraud or know that you are a victim, you may also place an Extended Fraud Alert, which stays on your credit file for 7 years and requires creditors to verify your request by contacting you on the telephone number(s) you provide to the credit reporting agency when you requested the Extended Fraud Alert. To place an Extended Fraud Alert, you will need to write to one of the nationwide credit reporting agencies and provide a valid police report showing that you have been the victim of identity theft (called an "Identity Theft Report") as well as a day and evening telephone number. With an Extended Fraud Alert, you may request two additional free credit file disclosures, and your name is removed from prescreened offers of credit or insurance for 5 years.

How to place a fraud alert

Placing a fraud alert is considerably easier than a freeze. All you have to do is call one of the credit reporting agencies and request a fraud alert be placed on your file. Whichever credit agency you call will notify the other two agencies so that they can update you in their files.

  • Equifax: 1-800-525-6285
  • Experian: 1-888-397-3742
  • TransUnion: 1-800-680-7289

A fraud alert will prevent you from getting instant credit which is usually offered at stores. An offer for instant credit usually sounds like this, "If you sign up for our Visa card today, you’ll get 10% off your purchases." Instant credit is an identity thief’s favorite kind.

Fraud Alerts

  • Do not prevent third parties from viewing your credit file however third parties are required to take certain steps to verify that you have authorized the activity on your account if they see a fraud alert on the credit file.
  • Still provide lenders with access to credit files and the ability to give credit to anyone they wish.
  • FREE

Security Freezes and How They Work

As of November, 2007, each state allows you to place a Security Freeze on your credit file for free or for a reduced fee. A Security Credit Freeze will put your credit file 'on ice' by preventing the information in your credit file from being reported to third parties, such as credit grantors and other companies. With a Security Freeze, lenders will not be able to gain access to your credit file unless you give permission by "thawing" the frozen file using a secret code, similar to a PIN number. This means that it's unlikely that an identity thief would be able to open a new account in your name.

Keep in mind that even with a Security Freeze, your credit file will still be disclosed in certain situations. For example, companies that you do business with (such as your mortgage, credit card, or cell phone company) will still have access to your credit report, as would collection agencies that are working for one of those companies. Companies will also still be able to offer you prescreened credit. Those are the credit offers you receive in the mail that you have not applied for. Additionally, in some states, potential employers, insurance companies, landlords, and other non-creditors can still get access to your credit report with a Security Credit Freeze in place. You will continue to have access to your free annual credit report, and you will also be able to purchase your credit report and credit score even after placing a Security Freeze.

How to freeze your credit report

  • Send a letter to each credit reporting agency requesting the freeze - preferably a certified letter.
  • Equifax Security Freeze
    PO Box 105788
    Atlanta, GA 30348
  • TransUnion Security Freeze
    PO Box 6790
    Fullerton, CA 92834-6790
  • Experian
    PO Box 9554
    Allen, TX 75013
  • Include your name, address, Social Security Number.
  • If you are an identity theft victim, provide a copy of your police report (or DMV investigative report) of identity theft.
  • Include a check or provide a credit card number and expiration date to pay for the fees.
  • Provide proof of residence such as your driver’s license, student ID card, utility bill, etc.
  • You’ll receive a PIN number - keep that safe and somewhere where you can find it later
  • To remove or thaw the freeze, write to all three credit reporting agencies requesting the freeze be removed. You’ll need your PIN for this.
  • It can take three business days or more after receipt of your letter for the freeze to be removed. If you lost your PIN, it can take even longer.

Because it can take a while to freeze and unfreeze your credit, it’s best to use this if you know you won’t be applying for any new credit, getting a new job or moving in the near future.

Security Freezes

  • Block your credit file from being disclosed to third parties (except as noted above). Should you wish to apply for a loan or service you must be proactive in requesting a lift in the security freeze so that the necessary third parties will be able to view the credit file if the file is frozen (except those exempted by law).
  • Remain on your credit file until you decide to remove or lift it.
  • Give you more control over who looks at your credit file.
  • There is a fee involved for placing and usually removing a security freeze
  • Is an effective way to prevent an identity thief from opening most new accounts in your name. However, a Security Freeze cannot prevent all types of identity theft. For example, a Security Freeze will not prevent an identity thief from using your existing credit cards or other accounts.

Bottom Line

Fraud Alerts are more commonly used than Security Freezes, but may not be as effective in preventing new accounts from being opened in your name should a real identity theft problem arise. Continue to check your credit report regularly by accessing your free annual report.  

Please review the below Helpful FAQs on Fraud Alerts and Security Freezes:

1. Can I open new credit accounts if my files are frozen?

Yes. If you want to open a new credit account or get a new loan, you can lift the security freeze on your credit file. You can lift it for a period of time. Or you can lift it for a specific creditor. After you send your letter asking for the security freeze, each of the credit bureaus will send you a Personal Identification Number (PIN). You will also get instructions on how to lift the freeze. You can lift the security freeze by phone, using your PIN. The credit bureaus must lift your freeze within three days. The fee for lifting the freeze temporarily is $10 for a date-range lift and $12 for a lift for a specific creditor.

2. How long does it take for a security freeze to be in effect?

Credit bureaus must place the security freeze no later than five business days after receiving your written request.

3. How long does it take for a security freeze to be lifted?

Credit bureaus must lift a security freeze no later than three business days after receiving your request.

4. What will a creditor who requests my file see if it is frozen?

A creditor will see a message or a code indicating that the file is frozen.

5. Can a creditor get my credit score if my file is frozen?

No. A creditor who requests your file from one of the three credit bureaus will only get a message or a code indicating that the file is frozen.

6. Can I order my own credit report if my file is frozen?


7. Can anyone see my credit file if it is frozen?

When you have a security freeze on your credit file, certain entities still have access to it. Your report can still be released to your existing creditors or to collection agencies acting on their behalf. They can use it to review or collect on your account. Other creditors may also use your information to make offers of credit-(unless you opt out of receiving such offers). See below for how to opt out of pre-approved credit offers. Government agencies may have access to your files for collecting child support payments or taxes. Government agencies may also have access in response to a court or administrative order, a subpoena, or a search warrant.

8. Do I have to freeze my file with all three credit bureaus?

Yes. Different credit issuers may use different credit bureaus. If you want to stop your credit file from being viewed, you need to freeze it with Equifax, Experian and TransUnion.

9. Will a freeze lower my credit score? No.

10. Can an employer do a background check on me if I have a freeze on my credit file?

No. You would have to lift the security freeze to allow a background check or to apply for insurance, just as you would to apply for credit. The process for lifting the freeze is described above.

11. Does freezing my file mean that I won’t receive pre-approved credit offers?

No. You can stop the pre-approved credit offers by calling 888-5OPTOUT (888-567- 8688). Or you can do this online at This will stop most of the offers, from credit bureaus. It’s good for five years or you can make it permanent.

12. Does my spouse’s file have to be frozen, too?

Yes. Both spouses have to freeze their separate credit files, via separate letters requesting the security freeze, in order to get the benefit. That means the total cost for freezing is $10 x 3 credit bureaus x 2 people = $60.

Topics: Identity theft, frozen credit files, mortgage lending services

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