If you’re like most people, you probably think a fraud alert is only for people who have been victimized by identity theft before. But that’s not the case at all! In fact, anyone can benefit from having a fraud alert on their credit file.
So, what exactly is a fraud alert, and how does it help protect you? Keep reading to find out.
What Are 3 Types of Fraud Alerts?
Fraud alerts are notifications that are placed on the credit report to warn potential creditors of possible identity theft. These alerts can help protect you from new account fraud such as someone opening up a new credit card or loan in your name.
There are three main types of fraud alerts, and each has its own benefits and drawbacks.
1. Initial Fraud Alert
The first type of fraud alert is the initial fraud alert. The alert is placed on the credit report for 90 days. It requires potential creditors to verify the complete identity before extending credit. This can make it more difficult for identity thieves to open new accounts in the victim’s name, but it can also delay or prevent you from getting credit when you need it.
2. Extended Fraud Alert
The second type is the extended fraud alert. It is placed on the credit report that warns businesses that you may be an identity theft victim. Moreover, the business need to take additional steps to verify the identity before extending credit.
Only victims who have reported identity theft or credit fraud can place an extended fraud alert on the credit report.
The alert remains on the credit report for seven years and makes it more difficult to open new accounts in the victim’s name.
3. Active-Duty Fraud Alert
Active-duty fraud alerts are placed on the credit reports of military members to help protect them from identity theft. The alerts require businesses to take steps to verify the identity of anyone trying to open new accounts or make changes to existing ones in the military member’s name.
Active-duty fraud alerts are free, and they last for one year. Military members can renew them if they’re still on active duty.
How Do I Place a Fraud Alert?
You can put a fraud alert on the credit report to warn creditors that you may have been the victim of identity theft. A fraud alert is free. Once you place the fraud alert in your file, businesses must verify your identity prior to issuing new credit in your name.
To place a fraud alert, you have to tell any one of the three major credit bureaus. Once a major credit bureau confirms the fraud alert, it notifies the other two credit bureaus, allowing them to place fraud alerts within your file.
Are you a victim of identity theft? If so, you may want to consider placing an extended fraud alert on your credit report.
If you provide a major credit bureau with an identity theft report, an extended fraud alert stays on the credit report for almost seven years.
What Happens When You Do a Fraud Alert for Protection?
When you set up a fraud alert with the credit reporting agencies, they place a notice on the credit report that alerts businesses to take additional procedures to verify the identity before extending credit in your name. This notice remains on the credit report for at least 90 days and can be renewed if needed.
You should also keep in mind that it cannot prevent all types of identity theft. For example, if someone has already stolen your information and already used it to open new accounts, a fraud alert cannot stop them. However, it can help stop someone from opening new accounts in your name.
Anyone who suspects that they are a victim of any identity theft, or if they have already been a victim, setting up a fraud alert is just one of the steps you can take to help protect your credit and your identity.
You can also place a freeze on the credit report, which help prevents someone from accessing your credit report altogether. For more information on fraud alerts and credit freezes, you can contact the credit reporting agencies directly.
Does A Fraud Alert Impact Your Credit?
A fraud alert is placed on your credit report to alerts creditors to verify your identity before extending credit. Fraud alerts can help protect you from identity theft, but they can also make it more difficult for you to get credit.
Fraud alerts make it more difficult for anyone to open new accounts in the your name because creditors have to take additional measures to verify the identity.
Additionally, fraud alerts stay on your credit report for at least 90 days, and in some cases, up to seven years, depending on the type of alert. This can make it difficult to obtain new credit during that time.
If you’re considering placing a fraud alert on the credit report, it’s important to weigh the pros and cons to decide if it’s right for you.
Bottom Line: Can Fraud Alerts Protect Me?
A fraud alert can help protect you from identity theft and help keep your credit scores intact. By placing a fraud alert on your account, you are telling creditors to take additional steps to verify that it is really you who is requesting the credit.
This extra layer of security can help prevent someone else from opening new accounts in your name or making large purchases on your existing accounts. With an identity theft and credit monitoring service, such as IdentityIQ, you have access to the tools and resources you need to help keep your identity protected from fraudsters.