Both of these allow you to protect your personal information, but one is more foolproof. Getty Images By Kimberly Lankford, Contributing Editor March 6, 2008 What is the difference between a credit freeze and a fraud alert? Who should take these steps? SEE ALSO: How to Protect Yourself Against Identity TheftYou can place an initial fraud alert on your credit report if you worry that you have been -- or could be -- the victim of identity theft. This is a good idea if you see any suspicious activity on your report or bills, if your wallet or other information has been stolen, if you've been a victim of a security breach, or even if you're concerned that you've revealed too much personal information online or over the phone. A fraud alert means that lenders must take extra precautions to verify your identity before granting credit in your name. It also entitles you to a free credit report from each of the bureaus. Advertisement Anyone can place a 90-day initial fraud alert in their credit report, which can be renewed in 90-day intervals indefinitely. Contact one of the three credit bureaus ( Experian, Equifax or TransUnion), which will notify the others. You can get an extended fraud alert, which stays on your credit report for seven years, if you can provide a police report or other official record showing that you've been the victim of identity theft. You'll get two free credit reports from each of the credit bureaus every 12 months, in addition to the free copies everyone can get every 12 months. Fraud alerts, however, aren't foolproof. If you'd like extra protection, you can get a credit freeze. When you freeze your credit record, you prevent lenders from seeing your credit report unless you specifically grant them access. This can prevent identity thieves from taking out new credit in your name, even if they have your Social Security number and other personal information. Your current creditors are exempt from the freeze, and you can use a PIN or password to open your file for certain lenders or for a certain time period if you plan to apply for credit. Advertisement A credit freeze may be a new option for you. In the past, only certain states allowed residents to freeze their reports. But the freeze became available nationwide on November 1, 2007. To be effective, you need to freeze your record at all three credit bureaus. The costs vary by state, but you generally have to pay $10 to freeze your account at each bureau and another $10 to lift it -– even temporarily. The charge may be waived if you've been a victim of identity theft. Some states offer free freezes to residents over age 65. It can take as little as 15 minutes or as long as three days to lift the freeze, depending on the state. Because of the time and money, a freeze may not be worth it if you're about to take out new credit. But it can offer strong protection for someone who worries a lot about identity theft, especially for seniors who can't check their records regularly and people whose information has been stolen in a security breach. For more information about credit freezes and each state's rules, see Consumer Union's guide to security freezes. For more information about identity theft, see the Federal Trade Commission's ID theft page, the Identity Theft Resource Center and the Privacy Rights Clearinghouse. Got a question? Ask Kim at firstname.lastname@example.org.