A fraud alert is a message placed on your credit reports alerting any lenders or parties that access your credit file the beware that the application they’re processing might be fraudulent. You can place a fraud alert on your credit report, if you suspect that you are a victim of identification (ID) theft. ID theft is when someone uses your name, Social Security number, date or birth and/or other information without your permission to open a credit card account, loan, or bank account. This could be the result of lost or stolen credit cards or wallet or through the internet, etc. This alert is to let companies accessing your credit report they need to take certain precautions.
If you are a victim of ID theft, you should immediately contact your creditors and also contact one of the three major consumer credit reporting agencies – Equifax, Experian or TransUnion. Place a fraud alert on one of your credit files, and that credit bureau will contact the other two to have the alert placed on there as well. The contact can be by phone, mail or through the internet. Placing the alert is free. You will receive a confirmation when the alert has been added to your credit report, which is usually within 24 hours. To cancel an alert you will need to contact the credit reporting agencies in writing.
There are three types of fraud alerts: Initial, extended and active duty.
Initial fraud alert – You can place this alert on your credit report, when you suspect that you may be a victim of fraud. You don’t have to be a victim of fraud to use this alert. It stays on your credit report for 90 days and then it’s removed. Creditors should take procedures to verify that you have authorized the opening of a new account, an increase of your credit limit on an existing account, or a request for a new card on an existing account. When the alert is placed, you can get a copy of your credit report free at each of the three national credit reporting agencies. You can also request that only the last four digits of your Social Security number are displayed on your credit report.
Extended fraud alert – An extended fraud alert is for placed on your credit report for seven years, when you have evidence that you are a victim of ID theft or fraud. In order to do so, you must write one of the three consumer credit reporting agencies, provide a valid police report proving that you are a victim of identity theft and give daytime and evening phone numbers. This requires the creditors to verify your request to be alerted by phone when someone tries to open a new account in your name.
Active Duty Alert – This is for those on active military duty who are away from their usual duty post. It is similar to the initial fraud alert. It is for one year and removes your name from pre-screened credit offers for 2 years.
You should be aware of the following regarding fraud alerts:
- It is more difficult to get credit when you place a fraud alert.
- It can delay your ability to get credit.
- It does not prohibit creditors from extending credit; it just gives them procedures to follow to verify your identification.
- It does not prohibit companies from viewing your credit report or granting you credit.
- The lenders or companies viewing credit reports with a fraud alert need to verify that you have authorized this activity on the account.
- The alert depends upon the credit reporting agencies placing the fraud alert on the file and the lender or company reviewing the credit file to follow procedures.
