Identity Fraud Protection You Can Set Up for Free

Real identity fraud protection rests on free tools the law gives you. Here is what a freeze and an alert each do, and how to pick.

What identity fraud protection means, and what it can stop

Identity fraud protection is the set of steps you take so a thief cannot open accounts or borrow money in your name. If someone has already used your identity, or you fear they will, this is the work in front of you.

It helps to know what these steps can and cannot stop. The CFPB says a security freeze can help stop an identity thief from opening a new credit account in your name. TransUnion says a freeze helps by stopping fraudsters from opening a new account in your name.

The free tools that do the real work

The core of identity fraud protection is two free tools: a credit freeze and a fraud alert. The CFPB says security freezes are free and you have a right to them by law. Experian says placing a fraud alert is completely free with no credit card required. Equifax says both types of fraud alerts are free.

Paid services exist, and some people buy them. TransUnion's page says credit freezes are always free and provided by credit reporting agencies. Start there.

How a credit freeze works

A credit freeze, also called a security freeze, locks your credit file. The CFPB says a freeze stops prospective creditors from accessing your credit file. TransUnion says a credit report stays frozen until you request its removal.

That lock works both ways. The CFPB says a freeze also stops you or others from opening accounts in your name. If you apply for a loan or a credit card, you lift the freeze first.

You have to do this at each bureau. The CFPB says you can freeze and unfreeze your credit records for free at Equifax, Experian and TransUnion. You must contact each one separately by visiting its website. TransUnion says you can also add a freeze by phone or by mail.

Lifting a freeze is free too. The CFPB says you can lift a freeze temporarily for a period of time you choose, and TransUnion says you can remove or temporarily lift a freeze before applying for credit. The CFPB says a security freeze can be removed free of charge no later than three business days after a request by mail.

A freeze will not hurt you. The CFPB says security freezes do not impact your credit scores in any way.

How a fraud alert works

A fraud alert is the lighter tool. The FTC says fraud alerts make lenders verify your identity before they grant new credit in your name. TransUnion says a fraud alert tells creditors to take extra steps to verify your identity before extending credit. Equifax says it encourages companies to verify your identity before extending credit.

Unlike a freeze, an alert does not lock your file. The FTC says a fraud alert does not prevent businesses from seeing your credit report. It just asks them to check first. TransUnion says lenders will call you to verify a credit application made in your name, which can help you spot identity theft.

An alert is also less work. Equifax says once you place an alert with one bureau, that bureau will send your request to the other two. Experian says a fraud alert placed at any credit bureau is shared with the others. You contact one company, not three.

Alerts last a set time. The CFPB says an initial fraud alert lasts up to one year unless you remove it sooner. Equifax says it can be renewed, and Experian says you can renew initial, active-duty and extended alerts up to three months before they expire. TransUnion says an extended fraud alert lasts seven years and requires proof that you are a victim of identity theft.

An alert will not hurt you either. Experian says a fraud alert does not hurt your credit history or credit scores in any way. It also cannot help or hurt your ability to qualify for a loan or credit card.

Freeze, alert, or both

Here is the plain difference. A freeze blocks access to your credit file. An alert leaves the file open but asks lenders to check with you first. The FTC says an initial fraud alert tells businesses to check with you before opening a new account in your name.

You can use both. The FTC says that even if you already have a credit freeze in place, you can also place a fraud alert. It also says freezes and alerts can help stop someone who already stole your identity from misusing it again.

A freeze fits if you do not plan to apply for credit soon and want the strongest block. An alert fits if you want lenders to call you. It also fits if you plan to apply for credit soon and want to skip managing three freezes.

For more on placing one, see our page on the experian fraud alert.

What paid services add

Companies sell identity theft protection plans, and some bundle several features. Two things they sell are worth separating from the free tools.

One is credit monitoring. TransUnion says a credit freeze will not send you alerts, but you can log in at any time to see your freeze status.

The other is a credit lock. The CFPB says credit reporting companies offer credit locks for a fee, often bundled with other paid services. TransUnion says a credit lock can come as a feature of credit monitoring services. A freeze, by contrast, is free, and the CFPB says you have a right to it by law.

For broader habits that lower your risk, see our page on how can we prevent identity theft.

How to check whether your identity has been stolen already

Before you build a plan, look for signs. The FBI says to monitor your accounts and personal information for suspicious activity. Experian says the first step in protecting yourself from identity theft is learning how it occurs.

Check your credit reports for accounts you do not recognize. The FTC says you can get another free report if you have a fraud alert on your credit file. Our page on credit report identity theft walks through what to look for. Our guide on how check for identity theft covers the warning signs.

Build your own identity fraud protection plan

Here is a plan you can start today, using only free tools.

First, check for signs of theft. Monitor your accounts and read your credit reports. Second, freeze your credit at Equifax, Experian and TransUnion, contacting each one separately. Third, place a fraud alert at any one bureau and let it share the request with the other two. Fourth, renew the alert before it expires. Experian says you can renew it up to three months before it does. Fifth, when you apply for credit, lift a freeze temporarily for a period you choose, which the CFPB says is free.

One note if you are protecting a child. The FTC says a child's credit freeze stays in place until you tell the credit bureaus to remove it. The process for a minor is different than for an adult.

That is real identity fraud protection. It costs nothing, it rests on tools the law gives you, and you control it.