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Fraud Alert vs. Credit Freeze: What Are the Differences?

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Your credit is like a home. Despite taking precautions, thieves can still infiltrate, stealing and causing you to suffer financially. Just as you would install a security system in your home to add a layer of security, you can add something similar to your credit report. You may be interested in placing a fraud alert or credit freeze on your account to provide additional protection. However, these have benefits and disadvantages, so you should familiarize yourself with each option to determine which is best for your needs. The following blog and a California identity theft victim lawyer can help you choose the best option for your circumstances, so you’ll want to keep reading to learn more.

What Is a Fraud Alert and How Does It Differ from a Credit Freeze?

A fraud alert is placed on a credit report once a consumer informs the reporting agency they believe they are a victim of identity theft. Generally, this allows lenders to access your credit report but informs them that they should take extra precautions to verify your identity before granting a loan or opening an account in your name. Generally, to add a fraud alert to your credit, you must submit a form of identity theft report, such as a police report.

A credit freeze, on the other hand, is more intense, as it prevents anyone from accessing your credit without your approval. When you place the freeze on your account, you will be assigned a PIN. If you wish to unfreeze your credit, you must use the PIN code to ensure you can unfreeze the credit, which will take up to one hour. To place the freeze on your account, you must contact each credit reporting bureau individually to report the freeze.

How Do I Know Which Choice Is Best for Me?

Choosing between a credit freeze and a fraud alert may seem like a difficult decision, due to the similarities. However, the best option for you will likely depend on your unique circumstances.

Because of the intensity of a credit freeze, it may be in your best interest to place a fraud alert on your account if you plan on applying for many loans in the future. For example, if you plan on moving, applying for a car loan, or taking out a personal loan, choosing a fraud alert may be easier. If you opt for a credit freeze, constantly unfreezing and re-freezing it can be time-consuming and ineffective to protect your identity.

However, if you’re older and don’t plan on applying for any new loans in the foreseeable future, it may be in your best interest to place a freeze on your report, as this can help provide peace of mind that your file is secure. Additionally, if your minor children have credit reports, placing a freeze can help prevent them from being victims, as children are often targeted due to their “clean slate” credit.

If you believe you are the victim of identity theft, understanding the steps you should take to proceed is critical. At Loker Law, our team will help guide you through the complexities of this matter to determine the best possible option for your needs. Additionally, we can help you reclaim your identity if you’ve been impacted. Contact us today to learn how we can assist you through these complex matters.

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