Tag Archives: protect your credit

Credit Freeze or Fraud Alert: Which is Better?

If you were one of the 143 million Americans affected by the Equifax security breach and fear what damage hackers or other criminals might do to your credit, then this information is for you.

You may choose to place a credit freeze or fraud alert on your credit report. Here is the difference between the two and how to do it.

Credit Freeze

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A credit freeze locks your credit down like a vault. No new credit can be established while a freeze is in place. In order to initiate a credit freeze, you will need to contact each of the individual credit reporting agencies. Below are their phone numbers. You will be required to prove your identity.

You ‘ll need to supply your name, address, date of birth, Social Security number and other personal information. Fees vary depending on the state you live in, but commonly range from $5 to $10.

After you place the freeze, each bureau will send you an individual PIN number. Keep this safe as you will need it in order to unfreeze your credit. You can lift the freeze temporarily or permanently. The bureaus have three days to lift the freeze. Again depending where you live, the cost to lift will vary.

It’s important to know that a credit freeze will not prevent your existing accounts to be accessed. You should check your statements regularly and continue to monitor your accounts for suspicious activity. You can still apply for credit but you’ll have to temporarily lift the freeze in order to do so. Also, a freeze will not affect your credit scores and you can still access your free annual credit report.

Fraud Alert

A fraud alert allows creditors to get a copy of your credit report as long as they take steps to verify your identity. For example, if you give the bureaus a phone number, the lender must call you to verify the application for credit is legitimate.

Fraud alert may prevent someone from opening new credit in your name, but again, it will not prevent someone from accessing your existing accounts. You will still want to monitor all of your accounts.

Fraud alerts are free, and if you notify one of the credit reporting agencies, they will inform the others of the Fraud alert and in turn will apply the alert on your credit. No need to call all three. Below are the three different types of fraud alerts available.

  • Initial Fraud Alert: This is for when you are temporarily worried about your identity, like if your wallet was stolen.
  • Extended Fraud Alert: These alerts are for identity theft victims and puts a Fraud alert on the file for 7 years.
  • Active Duty Military Alert: For those in the military who want to protect their credit while deployed, this fraud alert lasts for one year.

If you are considering whether or not to put a freeze or fraud alert on your credit, I suggest you consider how often you need access to credit when making your decision. If you plan to get pre-approved for a home loan or purchase a car in the near future, then a fraud alert will allow you to do so without taking extra steps. If your credit is set the way you want it, then a freeze could work to keep it that way.

Here are the phone numbers for the credit reporting agencies (also called credit bureaus):

Equifax — 1-800-349-996

Experian — 1‑888‑397‑3742

TransUnion — 1-888-909-8872

Many thanks to Chad Kusner, President, Credit Repair Resources, LLC, for this valuable information.

Please help others by sharing on social media. Thank you.

How to Protect Yourself From Equifax Hackers

Equifax, one of the three big credit bureaus, announced that hackers have illegally accessed 143 million Americans’ private information. This security breach occurred between May and July and was discovered on July 29th. Equifax has said it will notify all victims, but if you’d like to be proactive, here are steps you can take (with caveats).

Protecting Your Online Security: Actions to Consider

  1. Send a letter through the good, old-fashioned USPS mail requesting a copy of your free annual credit report. Look for anything that should not belong there, such as a new account you did not open or a hard inquiry you did not authorize.
    Caveat: Do not order your credit report through the Internet, because in doing so, you would give up important legal rights.
  2. Enroll in Equifax’s one year free monitoring service.
    Caveat: They will not help you repair your credit, only monitor it.
    Second Caveat: By signing up, you have to agree not to file a lawsuit against them. (That’s in the fine print under terms and conditions.)
  3. Place a fraud alert on your credit reports for one year warning creditors that you might have been a victim of identity fraud. A link is here.
  4. Put a security freeze on your credit report, restricting access.
    Caveat: If you want to apply for a mortgage, auto loan, or other financing, you will need to remove the freeze so the lender can access your credit report. A link is here.
  5. Use a free service such as CreditKarma or CreditSesame to watch for new inquiries and/or new accounts.
    Caveat: The credit scores from these sites are not your real credit scores from FICO.

Here is the link to Equifax’s page with more information for consumers about cybersecurity.

Stay safe and thank you for reading this post.

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