Consumers can use one or both tools to help protect their credit, Burke says. Following are descriptions of how these options compare in five different areas.
It costs money to initiate a security freeze with each of the three major credit bureaus, up to a total of about $30, says Mari Frank, author of the book "The Complete Idiot's Guide to Recovering From Identity Theft."
Frank says the exact cost depends on a borrower's state of residence, whether the borrower is a senior citizen, and whether he or she already is a victim of identity theft. If you have been a victim of identity theft -- and can prove it -- you can freeze your credit for free.
On the other hand, fraud alerts don't cost anything. In addition, consumers who put an alert on their records are allowed to get a free copy of their credit report with each of the three major credit bureaus, Frank says.
Consumers initiate security freezes by contacting all three credit reporting agencies, TransUnion, Equifax and Experian. But for fraud alerts, once you place a fraud alert on your credit report with any one of the three major credit reporting companies, that company will notify the other two and fraud alerts will also be placed on those files, too. Requests can be made via the agencies' websites, by telephone or by mail.
"I would recommend making any request to the bureaus in writing," Burke says. "It may add a few days to the process to mail it in, but it's a good idea to have written correspondence for your own personal records."
2. Strength of protection
Fraud alerts tell potential lenders to verify a person's identity before issuing new credit. However, there are no specific rules for doing this verification, and many consumer advocates are concerned that potential creditors don't do enough to confirm a borrower, Frank says.
"It's frustrating to have an alert if it has no teeth," she says.
By contrast, security freezes don't allow new creditors to look at a file at all.
"It puts a lock on your credit," Frank says.