Consumer Reports: Fraud alert v. credit freeze

Equifax has promised to roll out that new program by Jan. 31, 2018, if your personal information was compromised in the Equifax data breach financial experts at Consumer Reports said there are two moves you should be considering today.

The simplest move is to put a fraud alert in place, warning prospective lenders that your information has been compromised. 

"A fraud alert requires a lender to take reasonable, extra steps, to confirm that the person trying to open a new credit account, is, in fact, you," Consumer Reports Money Editor Margot Gilman said. 

Activating a standard fraud alert is free, just contact any one of the three big credit bureaus: Equifax, Experian or Transunion who then pass it on to the other two. 

"Typically, a fraud alert lasts 90 days," Gilman said. "Which means you have to re-up every three months. But on the plus side, you're entitled to a free credit report every time you do." 

A stronger option is a credit freeze which you need to request from each of the three major credit bureaus. It may involve a fee, but once in place, a freeze is the single, most effective way to protect against credit fraud.  

"Most creditors need to see your credit report before they issue you new credit," Gilman said. "But if you have a freeze on your account, they can't pull your file and may not extend you credit which should stop fraudsters." 

The downside is a freeze can also shut out companies you want to do business with. So, if you're in the market for a car or a home loan or even a new cell plan, take care of it before you institute the freeze or you may get hit with extra fees to lift the freeze and re-instate it.

If can prove you're already a victim of identity theft, a seven-year, extended fraud alert is also available. 


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