What is the purpose of a security freeze and how does it differ from a fraud alert?
Commonly referred to as a credit freeze, a security freeze, in most cases, prohibits a consumer reporting agency from giving your credit information to a third-party creditor. A security freeze is more effective than a fraud alert in preventing unauthorized persons from obtaining credit in your name. A fraud alert is a special message on your credit report that notifies potential creditors that they need to verify your identity before extending credit in your name. Three types of fraud alerts are available: (1) a 90-day initial fraud alert; (2) a seven-year extended fraud alert; and (3) a one-year active duty military alert. A security freeze, on the other hand, remains in effect until you ask the consumer reporting agency to lift it. The problem with fraud alerts is that a creditor is not required to contact you before extending credit in your name. Therefore, even with a fraud alert in place, identity thieves can still open new accounts and obtain new lines of credit in your name.
