When California introduced the first credit-freeze law in 2003, I thought it was overkill for most consumers.

I still do. But the universe of people for whom credit freezes make sense is rapidly expanding, and you might be among them.

A credit freeze, for those who don't know, is a way to block your credit reports to make it a lot tougher for an identity thief to get a loan or open a credit account in your name. That's because while a freeze is in place, no one, not even you, can open an account in your name. Lenders, insurers and even employers doing background checks are not able to access your credit file.

You can have the freeze lifted, or "thawed," if you need to get new credit, but you have to give the bureaus a specially issued personal identification number and a few days' notice to do so.

Since California pioneered credit freezes, dozens of other states and the District of Columbia have passed laws allowing at least some residents to lock up their credit reports. All other states except Alabama are considering similar laws.

(Credit freezes have become so popular so fast that I added a section on them in the second edition of my best-selling book, "Your Credit Score: How to Fix, Improve and Protect the 3-Digit Number That Shapes Your Financial Future," which was just released. OK, end of shameless plug.)

Fraud alerts, credit freezes differ
Despite their rapid spread, credit freezes remain a bit of a mystery to consumers. Many people don't realize they have access to this tool. Others confuse credit freezes with old-fashioned fraud alerts, which allow consumers to put an electronic red flag on their credit reports at the three major bureaus, Equifax, Experian and TransUnion.

In a couple of ways, credit freezes and fraud alerts are similar. Neither prevents or limits you from using the credit you already have. And neither prevents your current lenders from cruising your credit reports to see how well you're handling your cards, loans and lines of credit.

But freezes and fraud alerts differ in several important ways:

Fraud alerts can be ignored by lenders. By law, lenders who see a fraud alert on your file are supposed to take "reasonable steps" to verify the identity of someone who is applying for credit in your name. Those steps haven't been spelled out, however, and consumer advocates say fraud alerts are too often ignored.