Consumer Reports: Fraud alert vs credit freeze

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On the heels of the Equifax data breach, the company plans to allow consumers to lock and unlock access to their credit data for free for life. (WLS)

On the heels of the Equifax data breach, the CEO has retired and the company just announced plans to offer a new service, giving consumers the ability to lock and unlock access to their credit data for free for life. Equifax has promised to roll out that new program by January 31, 2018. But financial experts at Consumer Reports say there are two moves you should be considering today: a fraud alert and a credit freeze and explains the difference between them.

If your personal information was compromised in the Equifax data breach, Consumer Reports says there are several things you can be doing, right now.

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," said Consumer Reports Money Editor Margot Gilman.

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. 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," Gilman said.

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. 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," Gilman said.

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 ID theft, a seven-year, extended fraud alert is also available.

All Consumer Reports material Copyright 2017 Consumer Reports, Inc. ALL RIGHTS RESERVED. Consumer Reports is a not-for-profit organization which accepts no advertising. It has no commercial relationship with any advertiser or sponsor on this site. For more information visit

Related Topics:
financeconsumer reportscredit cardsdata breach

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