Fraud alert vs. credit freeze: what’s the difference?

A fraud alert is a temporary alarm system set up on your credit account that will inform you if there are any changes in your account. A credit freeze is a freeze placed on your credit file that blocks lenders from viewing your report without authorization.

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

Fraud alerts and credit freezes are two methods for protecting yourself from identity theft. But they’re not the same thing, and if you understand the pros and cons of each, you can decide which is best suited to your needs. A fraud alert requires creditors to verify your identity before allowing new credit accounts to be opened, whereas a credit freeze stops new credit accounts from being opened in your name. 

So, what’s the right choice for you in the fraud alert vs. credit freeze debate? Keep reading for a complete breakdown of both options. 

What is a fraud alert?

A fraud alert is when you put an added layer of security on your credit report that forces all lenders and financial institutions to verify your identify before approving a new credit account being opened. Typically, the creditor will call you whenever a new account request is initiated to confirm you’re the one asking for the account. 

People typically use a fraud alert if they’ve been a victim of identity fraud or if they suspect their information has been compromised. While a fraud alert adds some protection to your account, it’s not a guarantee, and there are still ways scam artists can get around the identity check. 

There are three main types of fraud alerts:

  • Standard fraud alert: A standard fraud alert typically lasts one year but can be renewed as many times as needed. Individuals don’t need to be victims of identity theft to activate this kind of fraud alert on their accounts. 
  • Extended fraud alert: An extended fraud alert lasts for seven years. This option is only available to those who’ve been victims of identity theft. To qualify, you have to file a report with the police or the FTC’s IdentityTheft.gov website. In addition to verifying your identity with each new account request, the extended fraud alert will remove you from marketing lists for credit and insurance offers for the next five years. However, if you want to remain on this list, you can choose to do so. 
  • Active-duty fraud alert: The active-duty fraud alert is only for military service members. When individuals go on active duty assignments, they can apply for this type of fraud alert to protect their accounts while they’re abroad. The alert typically lasts one year but can be renewed as long as the individual is deployed. In addition, they’ll be removed from marketing lists for two years unless they request otherwise. 

Fraud alerts are self-imposed and free to add to your account. 

How do you place a fraud alert?

You can place a fraud alert on your account by reaching out to one of the three major credit bureaus—Experian®, Equifax®, or TransUnion®. After you notify one bureau, it’s their responsibility to inform the others. You can set up a fraud alert online or contact any of the bureaus by phone with this request. You’ll need to submit your proof of identity to successfully set up the fraud alert. 

How do you remove a fraud alert?

Fraud alerts are automatically lifted from your account after the applicable deadline (one year for standard and active-duty alerts and seven years for extended alerts). However, if you want to remove the fraud alert earlier, you can. You’ll need to contact each credit bureau separately and request that the fraud alert be lifted. As was the case with setting up the alert, you’ll need to provide proof of your identity to remove the alert from your account. 

What is a credit freeze?

A credit freeze offers even more protection than a fraud alert. Essentially, a credit freeze stops anyone from accessing your credit report. This effectively prevents anyone from being able to open a new account under your name, as creditors need to review your report before approving a new application. You’ll be able to open new accounts only when you “thaw” or “unfreeze” your account.

How do you freeze your credit?

To freeze your credit, you’ll have to contact each of the three major credit bureaus separately. Note that fees are usually associated with a credit freeze, with the exact amount varying by state. On average, expect to pay around $10 per bureau for a credit freeze. You can apply for a credit freeze online or via phone for all three bureaus. 

When you’re setting up a credit freeze, you’ll be asked to set up a PIN or password, which can later be used to unfreeze your account. 

How do you unfreeze your credit?

Your report will stay frozen until you choose to “thaw” it. This means that you need to unfreeze your credit before applying for more credit, and this is usually the driving factor that motivates people to thaw their accounts. Often, people want to get a new credit card, loan, or mortgage or apply for a rental lease or some other credit account and need to give the lender access to their credit report. 

To unfreeze your account, you’ll need to contact each of the credit bureaus and provide your PIN. There may be a small fee associated with unfreezing your account with each agency. Once you put in a request to unfreeze your account, the change can take from as little as a few minutes to up to three days. As a result, it’s essential to give yourself plenty of time for the account to thaw before the lender goes to access your report. 

If you lose your PIN, unfreezing your account will still be possible, but it’ll take longer to approve. 

Do fraud alerts or credit freezes affect your credit?

No, fraud alerts and credit freezes don’t affect your credit. In fact, they can protect your credit from identity fraud attempts. Identity fraud is a serious situation that can significantly drag your credit score down and take months to years to clear up on your credit report. 

Which option is right for you? 

Ultimately, each individual needs to decide which option is right for them based on their situation. Some of the popular situations to consider that might call for either a fraud alert or a credit freeze are:

  • You’re in the process of or about to begin getting a mortgage, auto loan, lease, or another account: In this case, you don’t want to go through with a credit freeze, as access to your credit report will be necessary to approve your new application. Instead, a fraud alert should be sufficient to protect you. 
  • You’ve been a recent victim of identity theft or know your information has been compromised: If you’re seriously concerned about identity theft, you should likely opt for a credit freeze, as it’s more protective.
  • If you know you don’t need new credit for a while: Older people often are settled with all their credit needs—a mortgage, car loan, credit cards, etc. Therefore, they can comfortably assume they won’t be applying for new credit anytime soon and might feel more protected with a credit freeze. 

Note that you can have both hypothetically, although it might be somewhat redundant. Generally, most experts recommend choosing one or the other. 

Even with a credit freeze or a fraud alert on your account, it’s still crucial for you to check for fraudulent charges on your cards and look for red flags on your credit reports. You never know when something could slip through, and if it does, it’s crucial to act quickly. The longer something remains on your credit report, the longer it will impact your credit and be harder to rectify. 

If you don’t have the time or desire to check your credit reports, you can take advantage of the services provided by Lexington Law Firm. Our credit consultants will help you review your credit reports and file disputes if needed. Removing even one error from your credit report could result in a credit score increase. Get started today.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

Reviewed By

Paola Bergauer

Associate Attorney

Paola Bergauer was born in San Jose, California then moved with her family to Hawaii and later Arizona. In 2012 she earned a Bachelor’s degree in both Psychology and Political Science. In 2014 she graduated from Arizona Summit Law School earning her Juris Doctor. During law school, she had the opportunity to participate in externships where she was able to assist in the representation of clients who were pleading asylum in front of Immigration Court. Paola was also a senior staff editor in her law school’s Law Review. Prior to joining Lexington Law, Paola has worked in Immigration, Criminal Defense, and Personal Injury. Paola is licensed to practice in Arizona and is an Associate Attorney in the Phoenix office.