If you have ever had credit accounts opened in your name without your knowledge, then chances are you have been a victim of identity theft. There are several ways to protect yourself from this crime, including filing a police report and placing a security freeze on your credit report. One of the most common tactics to prevent others from opening credit in your name, however, is by placing a fraud alert on your credit report.
A fraud alert is one of several security measures placed on a credit report for identity theft management and prevention.
An initial fraud alert lasts for 90 days and is used when your credit and personal information has been compromised, such as when your wallet has been stolen or you have been a phishing scam victim. With an initial fraud alert, a creditor must take extra steps to verify identity, such as checking Social Security cards and driver's license information. Consumers use an extended fraud alert that lasts for seven years. Use the extended fraud alert if you have been a victim of identity theft and have a police report or identity theft report as supporting documentation. Creditors must contact you directly when there is an extended fraud alert placed on your credit report.
Fraud alerts will stop identity thieves from establishing new credit in your name, but it won't stop thieves from using your already established credit accounts. In addition, fraud alerts do not stop identity thieves from opening new credit accounts that do not require credit checks.
Many consumers confuse a fraud alert with a security freeze. The security freeze is used to restrict creditors and third parties from accessing your credit report until you instruct the credit bureaus to lift the freeze. The main difference between a fraud alert and a security freeze is that potential creditors can still access your credit report.
An initial fraud alert entitles you to one free credit report from each credit bureau and only the last four digits of your social security number will be viewable on your credit report. You are entitled to two free credit reports within a 12-month period from the credit bureaus and your name will be deleted from prescreened credit offer lists.