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Protecting Yourself: Fraud Alerts and Credit Freezes - Saturday, February 01, 2014
Consumers who have been a victim of identity theft have the ability to limit and deny access to their credit bureau reports to protect against fraud.  Two commonly used credit protection tools are Fraud Alerts and Security Credit Freezes, and understanding the benefits and consequences of each of these is important when deciding which will best suit your needs. 

What is a fraud alert?
This is a statement consumers can place on their credit bureau report.  It warns anyone looking at your report that you have been a victim of fraud and that extra precautions should be taken to verify your identity before extending a credit offer, issuing a new card on an existing account, or increasing existing credit limits.

How does it work?
There are three types of alerts: Initial Fraud Alert- good for 90 days; Active Duty Alert- lasts 1 year; and Extended Fraud Alert- lasts 7 years.  The active duty alert will also remove the person from pre-screened offers for two years.  The extended fraud alert requires that you submit a copy of your identity theft police report to the credit bureau.  Once you have submitted the required information to one credit bureau it will be shared with the other two bureaus.

What is a security freeze?
Most states will allow consumers to freeze their credit files, which prevents credit information from being shared with a third party (such as a lender or other credit grantor).  Consumers with frozen credit must un-freeze their accounts by using a code (like a PIN number) before lenders will be able to access credit bureau reports.  Depending on the state, freezing and un-freezing your credit may involve a fee.

How does it work?
A freeze will stay on your report until you remove it, it controls who can see your report, and it can keep an identity thief from opening new credit in your name.   Your credit file will still be accessible to companies you already do business with, collection agents who work with these companies, and  in some states non-lending agencies may also have access to your credit (employers, landlords, insurance and mobile phone companies). 

What you need to know:
View your credit report (from each bureau) free once each year at www.annualcreditreport.com.  If you are a victim of identity theft, visit Federal Trade Commission’s site at FTC.gov and search "identity theft” for complete details on what you should do.