A fraud alert is a free service the credit bureaus offer to protect you from ID theft. Learn how to set up a fraud alert on your credit.
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Identity theft is often a crime of opportunity as hackers exploit weaknesses in your digital security. The best identity theft protection services and best credit monitoring services can give you a solid wall of protection and some recourse for identity theft recovery.
However, the credit bureaus also offer free tools that go a long way toward preventing identity theft, such as a fraud alert.
A fraud alert is a free service offered by credit bureaus that acts as a red flag to any third parties pulling your credit report. If a creditor sees a fraud alert when viewing your credit report, they're required to confirm your identity, usually through a phone call, before issuing credit in your name.
While anyone can place a fraud alert on their credit report to mitigate the risk of identity theft, they especially benefit people who have already been targeted. This is because identity theft victims are often targeted repeatedly. According to the Identity Theft Resource Center, 29% of identity theft victims were repeatedly targeted.
There are three types of fraud alerts that you can place on your credit: initial, extended, and active duty. They all perform similar functions but differ in how long they last and who can sign up for them.
Initial fraud alert: You are most likely to place an initial fraud alert on your credit. Anyone can place an initial fraud alert on their credit. They last one year before the credit bureaus automatically remove them, at which point you will have to place another fraud alert on your credit. When you place a fraud alert on your credit report, you are given a free credit report for review.
Extended fraud alert: Extended fraud alerts were made specifically for people who have already been the victim of identity theft. Extended fraud alerts last seven years, and anybody who signs up gets two free credit reports in the first year. To sign up for an extended fraud alert, you will need a copy of a law enforcement agency report or an identity theft report from the Federal Trade Commission.
Active duty alert: This fraud alert is meant for members of the military going into active duty. Like an initial fraud alert, active duty alerts last one year. They also prevent insurance and credit card companies from contacting you with promotional offers for two years.
Setting up a fraud alert is quick and easy. You just need to contact one of the three credit bureaus, Experian, Equifax, or TransUnion. The bureau you call is legally required to tell the other two about the fraud alert.
Here's the contact information for each of the three bureaus:
A fraud alert isn't an airtight defense against identity theft, nor does it remedy any damage that an instance of identity theft has already caused. However, placing a fraud alert can offer some peace of mind and stop any further damage to your credit.
Fraud alerts and credit freezes are both free services offered by credit bureaus. However, while a fraud alert requires creditors to take extra precautions with your credit report, a credit freeze prevents them from pulling your credit report at all. Additionally, when you place a credit freeze, you must reach out to each credit bureau individually to freeze your credit.
No, a fraud alert has no impact on your credit score. It is also illegal for a creditor to reject your credit application because you have a fraud alert on your credit report.
Fraud alerts are completely free. Prior to 2018, placing a fraud alert and or credit freeze on your credit report used to cost a small fee. This fee was removed by the Economic Growth, Regulatory Relief, and Consumer Protection Act.
