What it does: Signals a lender that you might be the victim of ID theft and that it should verify the identity of a credit applicant.

What it costs: It's free. But if you sign up to have a company do it for you, it will cost up to $110 a year.

Should you do it? You don't need to if you have security freezes in place. If not, a free fraud alert is an emergency measure worth taking if you suspect that someone is attempting to steal your identity. But these alerts aren't foolproof. Some lenders don't see them and let crooks open fraudulent accounts anyway.

Where to get it: Go to the Web site of one of the three major credit bureaus to place a free 90-day fraud alert; the bureau will then place alerts with the other two. You can do this every 90 days if you wish. If you can prove that you're a victim of ID theft, you can place a free alert that lasts for seven years.

Beware: Fraud alerts pitched by private companies can be costly. For example, LifeLock, Namesafe, and TrustedID will file fraud alerts for you every 90 days for $99 to $120 a year. IDSecure refers to this as "credit security." If you decide it's worth paying for fraud alerts, consider Debix's service, which costs $149 a year. Debix lists its phone number on your alert, then tracks you down if a creditor calls. The company says it has stopped 1,330 identity thefts since August 2007.

This article was also published in Consumer Reports Money Adviser. Subscribe now to get more expert financial advice you can trust.