Imagine a stranger walking into a bank, using your name and your , and walking out with a credit card you'll get blamed for. That's , and it's the kind of thing that keeps people up at night, especially after one of those 'your data was in a breach' letters. The reassuring news: you have two free tools that shut this down, and almost nobody uses them.

The : lock the door

A credit freeze is the strong one. When you freeze your credit, lenders can't pull your , which means no one can open a new account in your name (not even you) until you lift it. Since most lenders won't approve credit without checking a report, a freeze slams the door on new-account fraud.

A credit freeze is free, and it does not affect your in any way. You're not closing anything or borrowing anything. You're locking your file so strangers can't open new accounts.

There's one catch: you have to set it up at all three bureaus separately (, Experian, and TransUnion), because a freeze at one doesn't cover the others. And when you want to apply for something, you temporarily 'thaw' it, then refreeze. That's a minor hassle for a serious layer of protection.

The : a heads-up to lenders

A fraud alert is the lighter-touch option. It doesn't lock anything. Instead, it flags your file so that lenders take extra steps to confirm it's really you before opening an account. Your credit still works normally; there's just a speed bump for fraudsters.

A nice bonus: unlike a freeze, you only have to place a fraud alert with one bureau, and that bureau is required to tell the other two. One call covers all three.

Which one should you use?

  • Freeze: the strongest protection. Best if you've been through identity theft, your info was in a breach, or you don't plan to open new credit soon.
  • Fraud alert: lighter. Good if you want a warning system without the thaw-and-refreeze dance, or while you're actively applying for things.
Tip
You can use both at once. Many people freeze their credit and place a fraud alert: belt and suspenders. Since both are free, there's little reason not to layer them if you're worried.

If you think fraud already happened

Spotted an account you don't recognize on your report? Freeze your credit and dispute the bogus accounts with the bureaus right away. For the full response plan, including reporting the theft to the , see Protecting Yourself From Identity Theft.

These tools sat unused for years because hardly anyone knew they were free and easy. Now you do. Locking down your own credit takes a few minutes and costs nothing.