Is a credit freeze or fraud alert right for you?

Credit freezes and fraud alerts can help reduce your risk of identity theft. Both are free and make it harder for identity thieves to open new accounts in your name. One may be right for you.

Credit freezes

A credit freeze is the best way you can protect against an identity thief opening new accounts in your name. When in place, it prevents potential creditors from accessing your credit report. Because creditors usually won’t give you credit if they can’t check your credit report, placing a freeze helps you block identity thieves who might be trying to open accounts in your name.

A freeze also can be helpful if you’ve experienced identity theft or had your information exposed in a data breach. And don’t let the “freeze” part worry you. A credit freeze won’t affect your credit score or your ability to use your existing credit cards, apply for a job, rent an apartment, or buy insurance. If you need to apply for new credit, you can lift the freeze temporarily to let the creditor check your credit. Placing and lifting the freeze is free, but you must contact the national credit bureaus to lift it and put it back in place.

Place a credit freeze by contacting each of the three national credit bureaus, Equifax, Experian, and TransUnion. A freeze lasts until you remove it.

Fraud alerts

A fraud alert doesn’t limit access to your credit report, but tells businesses to check with you before opening a new account in your name. Usually, that means calling you first to make sure the person trying to open a new account is really you.

Place a fraud alert by contacting any one of the three national credit bureaus. That one must notify the other two. A fraud alert lasts one year and you can renew it for free. If you’ve experienced identity theft, you can get an extended fraud alert that lasts for seven years.

Learn more about credit freezes, fraud alerts, and active duty alerts for service members. And, if identity theft happens to you, visit IdentityTheft.gov to report it and get a personal recovery plan.

For More Information, click here.

Teaching Suggestions

  • Ask students if they, their friends or relatives have placed a credit freeze or a fraud alert.  If so, what has been their experience?
  • Ask students to make a list of downsides to a credit freeze and to fraud alerts.

Discussion Questions

  1. What is the difference between a credit freeze and a fraud alert?
  2. Under what circumstance a credit freeze can be helpful?

Choosing a Credit Card? Ensure that Your Credit Report is Accurate

Correcting inaccuracies in your credit report may help you improve your credit history and credit score, which credit card issuers consider when deciding whether to offer you a card and how they will determine your interest rate and credit limit. You also can find out if an identity thief has opened credit cards or other accounts in your name.

By federal law, you are entitled to one free copy of your credit report every twelve months from each of the three major nationwide consumer reporting agencies (also called “credit bureaus”)—Equifax, Experian and TransUnion. Each company issues its own report, and because some lender do not provide information to all three of them, it’s useful to request your report from each one in order to get a comprehensive view of you credit history.

For additional information, go to

http://www.AnnualCreditReport.com; http://www.equifax.com; http://www.experian.com; http://www.transunion.com

Discussion Questions

1. Why is it important to check your credit reports every year?

2. Why should you request a credit report from each one of the three credit bureaus?

 

Teaching Suggestions

You may want to use the information in this blog and the above websites to discuss

* What should students do if they find inaccuracies in their credit reports?

* Have students draft a letter to the credit bureau to correct the errors in their credit report.