Now it is possible for anyone in the United States to freeze their credit report. A freeze stops, including you from accessing your credit report for loan purposes. No one can open a new account in your name however, your current accounts are still active and your current lenders can access your account to verify information.
Many may confuse a freeze with a fraud alert and while of course, there are similarities there are big differences when it comes to actual security for your account.
A fraud alert is an indication on the report that any lender should verify the identity of the person who is applying for credit. However, the steps that they should take are not clearly explained and a fraud alert could just as easily be ignored.
A freeze actually prevents the lender from even accessing the report at all. It can’t be ignored because the lender can’t even see the report.
There are reasons why you may want to consider a freeze. If your personal information has been compromised, if you have already been the victim of identity theft and other considerations.
And it’s not permanent. You can reverse it but it depends on the state you live in as to how long that may take. In Utah, it can be as little as 15 minutes but other states it may take 3 days or more.
A freeze will also cost you a small sum of money while a fraud alert is generally free.
However, if you are seriously worried it is probably a small price to pay.
For more information about credit freezes check this article from Liz Pulliam Weston.
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