A fraud alert notification is a critical security measure that helps protect you from identity theft by adding a cautionary flag on your credit reports. When a lender or creditor checks your credit, the fraud alert requires them to verify your identity before extending credit or opening new accounts. This extra step makes it harder for criminals to misuse your personal information.
How to Place a Fraud Alert
To set a fraud alert, you need to contact one of the three major credit bureaus—Equifax, Experian, or TransUnion—by phone or online. By law, the bureau you contact must notify the other two to place the alert across all reports. There is no cost to place a fraud alert.
Types of Fraud Alerts
There are three key types:
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Initial Fraud Alert: Lasts one year, available if you suspect potential identity theft. It requires creditors to verify your identity and entitles you to one free credit report from each bureau within 12 months.
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Extended Fraud Alert: Lasts seven years, requires an Identity Theft Report as proof of victim status. It includes two free credit reports per bureau during the year and removes your name from pre-screened credit offers for five years, reducing junk mail.
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Active Duty Military Fraud Alert: Available to active duty military personnel, lasts one year, removes your name from pre-screened offers for two years, and requires proof of military service.
Benefits and Limitations
Fraud alerts are effective at preventing unauthorized new credit accounts because lenders must verify identity. However, they do not block access to your credit report entirely like a credit freeze. Existing accounts or fraudulent activity using current card information may not be prevented by a fraud alert.
When to Use a Fraud Alert
Consider placing an initial fraud alert if you’ve experienced a data breach, lost personal documents, detect suspicious financial activity, or want proactive protection. An extended fraud alert is ideal for confirmed victims of identity theft.
Best Practices
- Renew your fraud alert after it expires if risk remains.
- Keep your contact information current with credit bureaus to ensure proper identity verification.
- Review your free credit reports from each bureau at AnnualCreditReport.com regularly.
- Be cautious when confirming identity over phone calls to avoid phishing scams.
Common Misconceptions
- Fraud alerts do not affect your credit score.
- You only need to contact one credit bureau to place an alert; they notify the others.
- Fraud alerts do not stop all forms of identity theft but add an important layer of security.
For detailed guidance, visit the Consumer Financial Protection Bureau’s explanation on fraud alerts and credit freezes, the FTC’s identity theft resource IdentityTheft.gov, and the major credit bureaus’ websites.
Understanding fraud alerts empowers you to better protect your credit and financial identity from misuse.
