Definition of credit fraud alert
What is a credit fraud alert?
A credit fraud alert is a notice sent to a credit bureau that a consumer’s identity may have been stolen and that a request for new credit on behalf of that consumer may not be legitimate. A credit fraud alert can protect you and your credit from opening fraudulent credit accounts in your name. You must notify one of the major credit bureaus (Experian, TransUnion, and Equifax) if your card has been stolen, and they may initiate a credit fraud alert.
Key points to remember
- A credit fraud alert is sent to credit bureaus to inform them that a consumer’s identity may have been stolen.
- To complete a credit fraud alert, the owner of the stolen card is required to present proof of identity to confirm that the request is valid.
- While the credit fraud alert is in effect, the lender receiving any credit application must take additional steps to verify that the application is genuine.
- Initial, extended and active military are the three types of credit fraud alerts.
Understanding the credit fraud alert
A credit fraud alert can be issued by a person to the credit reporting bureaus at no cost to the person submitting it. To complete this process, the person will need to present proof of identity so that the credit bureau can confirm that the request is valid.
Types of credit fraud alerts
There are three types of credit fraud alerts: initial military, extended, and active military.
An initial alert is valid for 90 days and may be renewed for periods of 90 days thereafter.
An extended alert is valid for seven years. It requires you to submit a police report to the credit bureaus informing them that you have been a victim of identity theft and that you have reported the crime to authorities.
Active military alert
An active military alert is valid for one year and can help protect your credit while you are deployed. People typically file credit fraud alerts if they believe they are victims of identity theft or if their information has been compromised as part of a data breach.
For even greater protection, when you’re certain your identity has been stolen, consider a credit freeze.
If you think someone may have stolen your personal or financial information and could use it to open fraudulent accounts in your name, contact one of the three major credit bureaus: Experian, Equifax, and TransUnion. Ask them to place a credit fraud alert on your account. You can usually do the process online, but you can also do it by mail or over the phone. The office you contact is supposed to let the other two know about the fraud alert, but you might want to contact them yourself to cover your bases. When you set up a credit fraud alert, you are entitled to free credit reports from every major credit bureau.
Check your credit report for signs of fraud, such as accounts you don’t recognize. While the credit fraud alert is in effect, if someone, including you, attempts to apply for credit on your behalf, the financial institution receiving the credit application must take additional steps to verify the credit. identity of the applicant. So, a fraud alert can create a bit of a hassle if you want to open a new account yourself, but it can also be complicated enough to prevent a thief from opening a fraudulent account in your name.