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Advice

Fraudsters are on the rise—and now may be the perfect time to freeze your credit

Americans have lost more than $100 million to coronavirus-related fraud this year. Here's why freezing your credit can help protect you in times of uncertainty.

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Americans have lost over $100 million to coronavirus-related fraud this year, and experts continue to warn consumers about scammers.

At a time when millions of consumers are looking for more financial assistance — whether it be in the form of second stimulus checks or job posting opportunities — you might have already noticed phony solicitations running rampant. Be it phone calls, phishing emails or stolen credit card numbers, fraudsters are getting clever in their attempts to gather your personal information.

Fortunately, protecting yourself from harmful credit activity is not as hard as you think. If you know you aren't going to apply for a new card or loan anytime soon, there is something easy and free that you can do to keep bad actors from wreaking havoc under your name: Put your credit on freeze.

Freezing your credit takes 30 to 45 minutes, and it can keep your credit profile secure while giving you peace of mind. When your credit is frozen, fraudsters are unable to open new accounts in your name, even if they have your personal information. No third party can access your credit when it is frozen; only you can still access your credit report (but you cannot apply for any new credit).

Freezing your credit is a smart idea for everyone, no matter your credit score, as it prevents unauthorized access to your credit report. Borrowers with perfect credit scores have frozen their credit off and on for years to prevent identity fraud. And during a time of economic uncertainty, a credit freeze can provide some sort of financial control when you're worried about your credit score.

You can always thaw your credit by calling the three main credit bureaus or by going through their websites. You'll need to thaw your credit freeze any time you apply for a credit card or loan. It adds an extra step, but this might be helpful if you're worried about borrowing more than you should.

An option if you don't want to freeze your credit

There is one scenario where it may not make sense to freeze your credit. If you are planning to apply for a credit card or loan in the near future, lenders will need access to your credit reports in order to approve you. 

As an alternative, credit monitoring can help you protect yourself in the meantime by tracking your credit and making it easier to spot potential fraud.

Credit monitoring is a service that monitors your credit history and automatically alerts you of changes made to your credit reports, helping you can be proactive before someone steals or misuses your personal information.

We ranked our top picks for paid and free credit monitoring services. Our pick for the overall best free service is CreditWise® from Capital One, whereas IdentityForce® made the number one spot for number-one paid service. Others that ranked included Experian free credit monitoring, Privacy Guard™, Experian IdentityWorks℠ and FICO® Advanced.

Before choosing the right credit monitoring service for you, review everything the service offers. A free service may only track one credit report and have only basic alerts for things like new credit inquiries and new accounts, while a paid service looks at all three of your credit files with each of the different bureaus and notifies you of much more, such as changes in your balance, credit utilization and dormant accounts. 

Read more about the best credit monitoring services.

CreditWise® from Capital One

CreditWise® from Capital One
Information about CreditWise has been collected independently by CNBC and has not been reviewed or provided by the company prior to publication.
  • Cost

    Free

  • Credit bureaus monitored

    TransUnion and Experian

  • Credit scoring model used

    VantageScore

  • Dark web scan

    Yes

  • Identity insurance

    No

See our methodology, terms apply.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.