Credit reports key to detecting fraud

Opening Credits columnist Eric Sandberg
Erica Sandberg is a prominent personal finance authority and author of "Expecting Money: The Essential Financial Plan for New and Growing Families." She writes "Opening Credits," a weekly reader Q&A column about issues for people who are new to credit, for

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Question Dear Opening Credits,
How long until a new credit card account shows on a credit report? I believe someone may be trying to open a credit card in my name. I've set up an alert, but don't know if it's too late. I checked my credit report, and it doesn't show any new accounts.   -- Mason


Dear Mason,
It is very scary and upsetting to think that a person has applied for a credit card using your personal information. I'm glad you've already taken the proper protective measures, which should stem any oncoming crime.

Because you set up a fraud alert through one of the credit reporting agencies, anyone who attempts to open a new credit account (or tries to increase the credit limit on one of your current cards) will have a hard time achieving that goal. Upon receipt of the application, the lender will take steps to verify your identity before approval. If they can't determine that you are the real applicant, the request will be denied. Thief thwarted.

In the event that you did not place this fraud alert before the person did his dirty work, you should be able to see evidence of it quickly. First, there will be a hard inquiry for credit placed on your credit report. If you didn't apply for the card, and you see a hard inquiry from a credit card company on your report, you need to contact that lender immediately. Second, if the card was approved, it will show up on your report as a new line of credit. This can take from a few days to a month, depending on when the issuer sends that information to the credit reporting agencies.

The good news is that even if the person did snake under the fraud alert fence, you can shut it down fast. Here are the steps you need to take:

  • File a police report. An illegal action has taken place, and it is very important to report it to the authorities. Although you may know exactly who is to blame, don't count on the perpetrator getting caught (or even contacted), as it's typically considered a low-priority crime. However, with the police report on file, you can ensure that you will not be liable for any charges the scammer made with the card.
  • Call the creditor. Explain that you did not apply for the credit line that is showing up in your name. In no uncertain terms tell them it is a fraudulent account, and that the card needs to be canceled immediately. None of the charges that were made were done by you, and you are not responsible for them in any way. Provide the police report information. With such a thorough and clear explanation, the lender should comply.
  • Contact the credit reporting agency.  Yes, you have the fraud alert in place now and that's great for the future, but you must have the fraudulent account removed from your credit report. Because you have the police report and have already worked it out with the credit card company, purging this account from your reports should be easy. TransUnion, Experian and Equifax all have detailed instructions on how to file a dispute. Do not use the online process, though, as you may waive your right to argue the case in front of a jury. You will need to mail in your dispute, including a copy of the police report, to only one of the agencies as the other two will be notified. The investigation will take about 30 days, and when they determine that the account is indeed not yours, it should be expunged. You will receive a letter outlining the results of the investigation plus a free credit report with the updated information.

Regarding the person you suspect is about to or has already tried to commit this crime, as long you feel it's not dangerous, go ahead and warn the person that you know what's going on and will not allow it to continue. I hate to think that anyone believes they can get away with ruining someone else's credit and financial life with no consequences

See related: 5 mistakes people make when disputing credit report errors, 10 surefire steps to get errors off your credit reports

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Updated: 03-25-2019