“Fraud Alert”: A Tool to Protect Your Credit

There's some good news for anyone who is worried that their financial information has fallen into the wrong hands. Consumers have a tool at their disposal, the “Fraud Alert,” which can be placed on their credit file should they become a victim of identity theft.

Fraud Alerts work to help prevent new credit accounts from being established in your name by any party. A Fraud Alert acts as a red flag on your credit report, visible only when businesses access your file as part of the process for possibly extending your credit. To place an alert on your credit report, call one of the 3 credit reporting agencies:

Ask them to flag your credit file for fraud. These agencies share data, so calling one notifies all. Within 24 hours, the alert will be attached to your credit file and your name will be removed from pre-approved credit and insurance applications for two years.

Types of Fraud Alerts

An "Initial Alert" will be active on your credit report for 90 days. Use this if someone has gained improper access to personal information that could potentially be used to open accounts in your name, such as your Social Security Number or your date of birth. An initial alert is appropriate if your wallet has been stolen or if you’ve been taken in by a “phishing” scam.

An "Extended Alert" is to be used if your identity has been stolen. With an extended alert, your credit file will remain guarded for seven years. In addition, your name will be removed from lists marketing prescreened credit offers for five years. In order to qualify for an extended fraud alert, you will need to provide proof of identity theft, such as a police report. Once an alert of any kind is in place, potential creditors must verify your identity prior to extending credit. Provide them with a phone number where you can be easily reached, and you should always keep this number current to minimize delays in issuing you credit. The alert will help to ensure that you are the only one opening accounts in your name. 

Active duty members in the military are eligible for a "Military Fraud Alert." This alert allows members of the military on active duty to prevent anyone from opening accounts in their name while they are overseas.

If you need to apply for credit while your credit file is on alert, notify your lender. To remove a fraud alert, you will need to send requests in writing to one of the three credit-reporting agencies.