Dealing with identity theft can be a headache. One of the ways you can deter fraud is to add a fraud alert to your credit report. When businesses check your credit report they see the fraud alert which lets them know to take more steps to confirm your identity.
Two Basic Types of Fraud Alerts
There are two types of fraud alerts and the type you add depends on whether you’ve already been an identity theft victim. The initial fraud alert stays on your credit report for at least 90 days. You can request credit bureaus to add the fraud alert without any supporting documentation of identity theft. When businesses see the initial fraud alert on your credit report, they’re required to take reasonable steps to confirm your identity before issuing credit or services.
Placing the fraud alert on your credit report is fairly simple. You can contact any of the three major credit bureaus (Equifax, Experian, and TransUnion) to let them know to place a fraud alert on your credit report. Then, that credit bureau is required to inform the other credit bureaus of your fraud alert so they can also add the fraud alert to your reports. You’ll have to confirm your identity by providing some personal identifying information.
The second type of fraud alert is the extended fraud alert. This type of fraud alert stays on your credit report for seven years. The extended fraud alert requires creditors to contact you or meet you in person before giving credit. This extra step insures that identity thieves don’t get credit in your name. To have the extended fraud alert places on your credit report. You must submit an Identity Theft Report to the credit bureau to have an extended fraud alert placed on your credit report.
You can get an Identity Theft Report by reporting the identity theft to your local law enforcement. Make sure you give all the details about which accounts are fraudulent, the date the fraud happened, and the name of the perpetrator if you know it, so credit bureaus can block reporting of these accounts.
There’s a third type of fraud alert that’s available to active duty military consumers. This type of fraud alert will stay on your credit report for one year.
Each of the credit bureau websites give instructions to add a fraud alert to your credit report. The initial and military fraud alerts can be added online. The extended fraud alert can only be added by mail.
Entitled to a Free Credit Report
Another perk of adding a fraud alert is that you’re entitled to a free copy of your credit report from all the three credit bureaus. With the extended fraud alert, you’re entitled to two free credit reports from each of the credit bureaus within 12 months.
If you’re adding the fraud alert because your personal information has been compromised, make sure you take advantage of this free report to confirm that you haven’t already been a victim of identity theft. If you find fraudulent accounts on your credit report, dispute them with the credit bureau and let the information furnisher know that the account is fraudulent.
Fraud Alert Loopholes
While a fraud alert can prevent identity theft, it doesn’t completely stop thieves. For example, thieves can still commit fraud using your existing accounts. They may also be able to open accounts with businesses that don’t check your credit report.
Potentially Annoying Drawback
The fraud alert can make it harder for you to open accounts. You may not be able to open accounts instantly, since businesses will have to confirm your identity before you can be approved.