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Credit Scores and Reports

Fraud alerts: What they are and how they work

Fraud alerts provide some protection from identity theft, but for people at risk, a credit freeze might be the most effective option

Summary

A fraud alert will let lenders know you might be a victim of fraud. If you have one, lenders will typically ask for additional identification before opening a new account in your name.

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In 2019, the Federal Trade Commission received 3.2 million reports to its Consumer Sentinel Network, including nearly 1.7 million fraud reports. Many people will experience some form of fraud at least once in their lifetime.

One way to protect yourself is to place a fraud alert on your credit report. It’s a quick and easy way to add a minimal level of protection to your credit. Here’s what you need to know.

What is a fraud alert?

A fraud alert is a security notice placed on your credit report that lets prospective lenders know you may be a fraud victim. Fraud alerts let credit card issuers and other lenders know to ask for additional identification before extending you credit. While not everyone’s situation will warrant a fraud alert, some people will benefit from the service.

“If you’ve been a victim of identity theft or you’re going through a divorce that’s not going well or any kind of situation where you worry about your identity being stolen, it’s a good time to look into a fraud alert,” says Beverly Harzog, credit card expert and consumer finance analyst for U.S. News & World Report.

See related: How to report and protect yourself from credit card fraud

Different types of fraud alerts

There are three types of fraud alerts: an initial fraud alert, an extended fraud alert and a military fraud alert.

  1. An initial fraud alert lasts for one year. Anyone can place an initial fraud report, and you won’t need any additional documentation.
  2. An extended fraud alert lasts for seven years. To place an extended fraud alert on your credit report, you will need either a police report or an identity theft report from the Federal Trade Commission.
  3. A military or active-duty fraud alert is available to U.S. military service members and lasts for one year. It will notify lenders to proceed carefully and take extra steps to verify identity. You must provide proof that you’re active in the military.

How to place a fraud alert

Placing a fraud alert is easy to do. You simply contact one of the three major credit bureaus (Experian, TransUnion and Equifax), and it will notify the other two.

  • To place an Experian fraud alert: 1-888-397-3742; Experian, P.O. Box 9554, Allen, TX 75013.
  • To place a TransUnion fraud alert: 1-800-680-7289; TransUnion Fraud Victim Assistance Department, P.O. Box 2000, Chester, PA 19016.
  • To place an Equifax fraud alert: 1-888-766-0008; Equifax Consumer Fraud Division, P.O. Box 740256, Atlanta, GA 30374.

See related: Should I periodically replace my card to deter fraud?

How to lift a fraud alert

Lifting a fraud alert happens in one of two ways, says lawyer and identity theft expert Steve Weisman.

“You can let the fraud alert expire (make certain to mark it on your calendar) or contact the credit bureau before its expiration and remove it,” he said.

You must contact all three credit bureaus to lift a fraud alert, and each bureau has different requirements. They all require the consumer to provide two documents verifying identity: for instance, Experian requires a government-issued identification card, driver’s license or state-issued identification card, in addition to a copy of a utility bill or bank or insurance statement.

  • To lift an Experian fraud alert: Mail a written request with required documentation to Experian, P.O. Box 9554, Allen, TX 75013.
  • To lift an Equifax fraud alert: Call 1-888-836-6351 or mail a written request with required documentation to Equifax Information Services LLC, P.O. Box 105069, Atlanta, GA 30348.
  • To lift a TransUnion fraud alert: You can make a request online, call 1-800-689-7289 or send a written request with documentation to TransUnion, P.O. Box 2000, Chester, PA 19016.

Will a credit freeze work better than a fraud alert?

A credit freeze prevents lenders from accessing your credit report, and it effectively bars you from applying for any new credit. Depending on your situation, it may be a better option than a fraud alert.

“It is the best safeguard you can use, since it prevents anyone from opening accounts in your name,” says Weisman. If you aren’t regularly seeking credit it “makes sense to keep your credit frozen.”

Unlike a fraud alert, you must call all three credit bureaus to place a credit freeze. Depending on the bureau, you may be issued a PIN that you’ll need to manage your credit freeze (for instance, if you need to apply for a credit card or loan and you want to temporarily remove the freeze). There is no charge to freeze your credit.

See related: How to freeze your credit with Equifax, Experian and TransUnion

Bottom line

Matt Herren, director of payment strategies at Computer Services Inc., believes consumers should protect themselves since personal information is so readily available.

“If you don’t do something – if you don’t plant a flag – it gives the opportunity to a bad actor to go and do it for you,” he says.

What you need will depend on your situation, but a fraud alert is a great place to start.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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