Credit Report Security Freezes and Fraud Alerts: What’s the Difference?
With major data breaches becoming too common, people often wonder how to stop criminals from stealing their identity. And rightly so. Identity thieves drain bank accounts, run up charges on lines of credit, and steal tax refunds. It can take months to detect the damage and years to clean it up.
- Hackers recently stole highly sensitive personal information on over 145 million people—nearly one out of every two Americans—from a major credit bureau. The data exposed in the breach included people’s names, Social Security numbers, and birth dates.
- Information on over 50 million credit and debit cards was stolen by hackers from a national home improvement retailer. This information was later sold to criminals on the dark web.
- A data breach at a ride sharing company exposed private information on roughly 50 million customers and 7 million drivers. The data stolen included driver’s license information for approximately 600,000 drivers.
Placing a “fraud alert” or “credit freeze” on a credit report are two steps to protect against identity theft. But there are differences between fraud alerts and credit freezes.
A “fraud alert” requires creditors to verify a person’s identity before extending credit or opening a new account. For example, a lender may call a borrower before making a car loan. A fraud alert is an extra layer of authentication, not a prohibition on the opening of new accounts.
There are two main types of fraud alerts—an “initial” fraud alert and an “extended” fraud alert.
An “initial” fraud alert lasts for 90 days, but can be renewed. An “extended” fraud alert lasts for seven years, but can be removed sooner. An extended alert requires victims of identity theft to provide the credit bureaus with a copy of a report of identity theft filed with law enforcement.
Both alerts are free and temporary. Once a request is made for a fraud alert with one credit bureau—Experian, TransUnion, or Equifax—the alert will be placed on credit reports with all three credit bureaus.
To request a fraud alert, contact the major credit bureaus toll-free as follows: Equifax: (888) 766-0008; TransUnion: (800) 680-7289; Experian: (888) 397-3742.
A “credit freeze” prevents new creditors from accessing a person’s credit report. Without seeing a person’s credit history, most creditors will not open new accounts or extend credit.
A credit freeze provides more protection than a fraud alert against fraudulent accounts being opened. Because credit freezes also block legitimate inquires, they require more planning than fraud alerts.
With a credit freeze in place, a person must use a PIN and contact the credit bureaus to lift or “thaw” the freeze before being approved for new credit. This process can take up to three business days. In a pinch, this could prevent a person from quickly getting credit.
Credit freezes stay in place until permanently lifted. Victims of identity theft can freeze their credit reports without charge. Non-victims can freeze their credit report for a $5 fee. Victims of identity theft can thaw a credit freeze without charge. Non-victims may be charged a $5 fee.
For instructions on requesting a credit freeze, you may call the credit bureaus toll-free as follows: Equifax: (800) 349-9960; TransUnion: (888) 909-8872; Experian: (888) 397-3742.
For more information about fraud alerts, credit freezes, credit reports, and identity theft, contact:
Office of Minnesota Attorney General Lori Swanson
445 Minnesota Street, Suite 1400
St. Paul, MN 55101
(651) 296-3353 (Twin Cities Calling Area)
(800) 657-3787 (Outside the Twin Cities)
TTY: (651) 297-7206 or TTY: (800) 366-4812
Credit reports include information about a person's account and repayment history. Information in a credit report impacts how much a person pays for loans and other credit and sometimes whether a person can get credit.
This handbook is a guide to using credit cards. It will explain why most of us choose to use credit, provide tips to help you choose the right credit for you, detail the fees and terms to know, explain common pitfalls, and clarify your credit rights.
Guarding Your Privacy
Identity theft is on the rise nationwide and is helped along by lenders and creditors who are willing to grant thousands of dollars in credit in mere minutes with little or no proof of identity. This booklet will help you guard your privacy, protect your personal information and avoid identity fraud.