ITRC Fact Sheet 124 – Fraud Alerts and Credit Freezes
There are three processes you can use to help minimize attempts for fraudulent use of your Social Security Number (SSN) in gaining access to new lines of credit.
90- DAY FRAUD ALERTS
The least invasive process is a “fraud alert.” This is a notice placed in your credit file to alert creditors to verify your identity prior to issuing credit. It is established by contacting the Credit Reporting Agencies (CRAs) by phone, on-line, or by mail (See ITRC Letter Form 124C). It stays in place for 90 days and is renewable. Fraud alerts do not affect your ability to use existing credit cards or your credit score. The placement of a fraud alert is free.
Ideally, credit issuers should contact you prior to issuing any new line of credit. However, some credit issuers will simply ask for verifying documents at the point of sale. Other credit issuers don’t use credit reports so they do not see the fraud alert. Therefore, a fraud alert is not as proactive as placing a Credit Freeze.
7-YEAR FRAUD ALERT FOR VICTIMS
Victims of identity theft, with a police report, may request a 7-year fraud alert on their credit report. (See ITRC Letter Form 124B) They may also add a consumer statement, of up to 100 words, with specific instructions as to contact methods or descriptions of possible perpetrators. Again, any fraud alert is not as proactive as placing a Credit Freeze.
CREDIT (or Security) FREEZES
A “freeze” is a tool available to consumers which prevents new creditors from viewing a credit report or score. This process locks the data at the consumer reporting agency (Experian, Equifax, TransUnion) until an individual gives permission for the release of the data (thaw). While it does not affect your credit score, it does eliminate the possibility of instant credit. Depending on your state law, the CRA’s may take up to three days to “thaw” your report. This is an important consideration to keep in mind. However, it will also stop thieves from opening accounts. See ITRC’s Interactive Map to view your state’s law. In most cases, a victim of identity theft with a police report is not charged for this service. Prices for consumers vary from state to state.
It should be noted that companies you already have a business relationship with may view your credit report for account review purposes. However, potential new creditors, insurance companies, landlords and some employers doing financial background checks will be told that your report is unavailable for viewing.
Each time you wish to qualify for a loan, credit card, tenancy or a job, you may need to “thaw” the report. This may interfere with a rapid need for your report. A credit report may be thawed for a specified period of time, for a specific category of creditor, or until you decide to freeze it again. You can ask the business which credit agency they use and just thaw that one agency’s report. If they don’t know, you will need to thaw all 3 reports.
In ITRC’s opinion a freeze is the best form of financial identity theft protection currently available, but it is by no means a guarantee of safety.
For example, companies can, and will, issue credit without looking at a report. However, you have a very strong argument as to the fraudulent nature of that account. Also, a credit freeze will not stop or fix an ongoing identity theft. However, for many of us, the freeze not only brings peace of mind but gives us some measure of control to our financial security, especially with an unstoppable identity thief in your life.
Companies that will be able to view your report even with a freeze include:
- Ones that you already have an existing business relationship with or a collection agency acting on behalf of the existing account, for purposes of reviewing (account maintenance, monitoring, credit line increases, and account upgrades and enhancements) or collecting the account.
- A consumer’s information may be used for the purposes of prescreening as provided for by the federal Fair Credit Reporting Act, even if a security freeze is on the report.
ITRC Letter Form 124A is a sample letter to request a credit freeze from the three credit reporting agencies.
Related Links:
ITRC Fact Sheet 133 – The Military and Identity Theft
This fact sheet should not be used in lieu of legal advice. Any requests to reproduce this material, other than by individual victims for their own use, should be directed to itrc@idtheftcenter.org
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