Identity Theft Protection

Active Duty Alerts, Fraud Alerts and Security Freezes

Both Active Duty and Fraud Alerts are employed by notifying the credit bureaus that any business that pulls your credit report must absolutely verify your identity before issuing any credit.

Active Duty Alerts
Military personnel on active duty can place an active duty alert with the Big Three. The service member need only contact the bureaus and place a statement that he or she is on active duty in the credit file. The alert will remain for 12 months and can be renewed. Another effect of the active duty alert is the temporary suspension of pre-screened offers for two years.

Fraud Alerts
An initial Fraud Alert can be placed on your credit report even if you haven't been a victim of identity theft. It's only good for 90 days, however. And when you contact one credit bureau, it’s supposed to contact the others (a process known as a “one call” alert). But I recommend contacting all three just to be safe. The alert will be in place for three months and can be extended to seven years, but only if a police report has been filed and provided to the bureaus. After placing an extended alert, consumers can obtain two free reports in the 12 months that follow. There are two downsides to placing a fraud alert on your credit file:

(1) you will not be able to get credit approval as quickly as you would otherwise, making instant credit impossible, and
(2) you will not be able to get your online credit report.

Security Freeze
When a security freeze is placed on a consumer’s credit file, the credit bureaus will freeze credit reports. This prevents anyone from performing an inquiry while the freeze is in place.

For victims of identity theft and California residents, the freeze is provided at no charge. Some states are also enacting similar laws, or requiring that credit bureaus provide a security freeze to consumers for a small fee. Yet there are various considerations, such as whether or not the consumer is a victim of identity theft, and rules concerning date range enactment as well as whether or not a specific credit grantor may be lifted from the freeze. The following states, as of September 1, 2007, offer some sort of security freeze option:

• California²¹
• Colorado
• Connecticut
• District of Columbia
• Delaware
• Florida
• Hawaii
• Illinois
• Indiana
• Kansas
• Kentucky
• Louisiana
• Maine
• Minnesota
• Mississippi
• Montana
• Nebraska
• Nevada
• New Hampshire
• New Jersey
• New Mexico
• New York
• North Carolina
• North Dakota
• Oklahoma
• Pennsylvania
• Rhode Island
• South Dakota
• Texas
• Vermont
• Washington
• West Virginia
• Wisconsin
• Wyoming

In many cases, bureaus will provide the consumer with a security freeze PIN, which can be used to take the freeze off. This lifting of the freeze is often date range (usually five days). For the states that permit it, the PIN can remove the freeze temporarily for the purpose of obtaining credit, and it can even remove it “globally” for a specified period of time or a creditor-specific allowance. That is, the consumer will be given a unique code to provide the creditor, and the creditor will in turn provide it to the agency. The fee for a temporary lift of the freeze can also vary based on the state and whether or not the consumer is an identity theft victim.

Though this may slow the ability to obtain credit, it’s a nearly ironclad way to prevent identity theft. But be aware that the file is truly frozen, and not even address information provided by creditors can be updated while the security freeze is imposed. The security freeze remains in place until the consumer cancels it, which is free in all of the states listed here.


20. Be aware that creditors often offer their own credit report monitoring, and the prices and features vary wildly.
21. Many states have freeze exemptions for some types of inquiries. In California, for example, the following are exempted from a security freeze in California: companies with which the account holder has a current financial relationship; a prospective assignee of a financial obligation that is reviewing the account for maintenance, monitoring, increasing credit lines, account upgrades and enhancements, or collecting the financial obligation; state or local agencies, law enforcement, trial court, child support agencies or private collection agencies acting on a court order, warrant, or subpoena; the California Franchise Tax Board, if it is investigating or collecting delinquent taxes or unpaid court orders or fulfilling any statutory responsibilities; the California State Department of Health Services or its agents or assignees if they are investigating Medi-Cal fraud; uses falling under FCRA Section 608—Disclosures to Governmental Agencies; uses falling under FCRA Section 625—Disclosure to FBI for Counterintelligence Purposes; FCRA defined prescreening; any person or entity for the purpose of administering a credit file monitoring subscription service to which the consumer has subscribed providing a consumer with a copy of his or her credit report upon the consumer’s request; any person or entity for the purpose of providing a consumer with a copy of his or her credit report upon the consumer’s request. Check your state laws.