If you find yourself the victim of identity theft, you have options available to help prevent fraudsters from doing further damage. One of these options is called a fraud alert.
When a creditor processes your credit application, they perform a credit check. They will be granted access to your credit file at one of the national credit bureaus: Experian, TransUnion, or Equifax. Implementing a fraud alert will pause the credit check process and notify the creditor that they need to validate your identity before proceeding.
Simply put, a fraud alert functions as a red flag, placing a security note on your credit report to tell lenders you might be the victim of fraud. This extra layer of defense will deter criminals. It also makes it harder for them to try using an existing account, such as a credit card.
A fraud alert might not be the best course of action for everyone. However, it will benefit those dealing with identity theft, or those most at risk.
If you are considering this route, it’s important to know that there are three different types of fraud alerts.
- A temporary fraud alert: This lasts for only one year, and doesn’t require any additional documentation to place. You are also able to add this to your credit report any time, and renew it as many times as you want.
- An extended fraud alert: This is designed for victims of credit fraud or identity theft and lasts for seven years. If you decide to place an extended fraud alert on your credit report, you’ll also be required to file a police report or an identity theft report from the Federal Trade Commission.
- A military or active-duty fraud alert: This is only available for U.S. military service members and lasts for one year, unless removed earlier. You’ll be required to provide proof of active military service for this to go into effect.
Once you’ve decided which option is best for your situation, you only need to contact one of the three major credit bureaus. They will notify the remaining two organizations.
How Do You Remove a Fraud Alert?
In the event you’ve decided to lift the fraud alert, you have one of two options:
- You can simply let the alert expire, or
- You can contact the credit bureau before it expires and ask for it to be removed
If you decide to lift the alert before expiration, keep in mind that each bureau will have different requirements. They all require two documents to verify your identity. For example, some ask for a government-issued identification in addition to a bank or insurance statement.
You also have the ability to update contact information by reaching out by phone or mail to any of the three nationwide credit bureaus.
Is It Worth It?
Overall, fraud alerts are a great tool to protect yourself from certain risks. Your actions could deter bad actors from taking advantage of you. If you suspect your credit card number has been compromised or stolen, placing a fraud alert will provide a quick added measure to secure your credit files.
In the event you discover your data wasn’t stolen, the process to having the fraud alert removed is also a simple one.
A fraud alert won’t disqualify you from getting a credit card or receiving in-store credit offers,. It will slow down the process, though. For example, you may have to contact retailer representatives in order to provide additional identification and complete your application.
The bottom line: A fraud alert isn’t completely foolproof, but it is a good starting place, and it’s completely free!