Differences Between a Fraud Alert and Security Freeze

Making bad financial decisions will not only send you down the rabbit hole of debt, but can also hurt your credit score. Some of these negative financial decisions include missing a credit card payment, maxing out your credit cards or bankruptcy. Another factor that can give you bad credit is becoming a victim of fraud. Here are a few ways that credit providers and bureaus can counteract this type of illegal activity:

What is credit card fraud?
Credit card fraud is when someone uses your credit card or personal information for fraudulent purposes. This can happen if your physical card is stolen or a cyber criminal accesses your information online. With so many technological and online advancements these days, criminals have a number of ways of getting your information. If you have become a victim of this crime, you should take care of it right away. You don't want the thief to open up a new line of credit or running up your balance because you will be in a financial pickle. Two options to help prevent someone from stealing your credit card information include putting a fraud alert on your card or a security freeze.

Fraud alert
Credit card fraud can be an unfamiliar charge you found on your credit card statement or you seeing on your credit report you have a new line of credit open. If you feel that you may be a victim, you can put a fraud alert on your account. This cautionary flag will notify your creditors and other lenders they should ask for credentials when looking to do any credit activity in the future. If you put a fraud alert on your credit report from any one of the major credit bureaus, they will then notify the other bureaus. Fraud alerts last for 90 days and can be taken off at anytime for no charge.

Security freeze
A more extreme way to make sure your credit isn't used illegally is by putting a security freeze on your account. This will prevent lenders and credit bureaus from accessing your report entirely. In this situation, you will need to alert each credit bureau about your decision to put on a security freeze. This security measure is left on indefinitely until you have it permanently or temporarily removed while you are applying for credit.