In a lot of ID theft prevention material, you'll see advice to place a fraud alert on your credit report. While it doesn't hurt, it may not help much either.

A fraud alert tells a lender you may have been a victim of fraud. The idea is that the lender will refuse a new credit application if someone steals your identity and tries to open a loan or credit card. This may happen - but it's completely voluntary. The lender may heed it or ignore it. So with a fraud alert, you may find that you get rejected when trying to open a new account with one lender, but not with another. Again, it's completely voluntary and depends on how badly they want to make the sale. One nice thing is that you only have to file an alert with one credit bureau, and by law it must instruct the other two to put alerts on your file.

As a final thought, a fraud alert is different from a credit freeze.