Placing Fraud Alerts On Your Credit Report: When and How To Do It

Identity theft has become increasingly common – but so have preventive measures. Although there are various methods to choose from, one of the most effective ways to go about protecting yourself is to take advantage of a fraud alert. Fraud alerts are messages you can add to your credit report from each major credit bureau (Equifax, Experian and TransUnion) indicating that you believe you may be a potential victim of identity theft. Therefore, when people (such as potential creditors, renters or anyone who needs to pull your credit) view your credit report, they will be notified that further steps are needed to verify your identity. These extra steps significantly mitigate the chances of someone else establishing new lines of credit in your name without your consent.

Types of Fraud Alerts

There are three different types of fraud alerts, each catering to a different type of individual. Although they vary slightly in terms of their features, all types perform the same general function in working as a safeguard:

1. Initial Fraud Alert

• Eligibility: Any individual with a credit report is eligible as there are no prerequisites for placing this type of fraud alert. It is generally meant for individuals who are concerned about being victims of fraud (such as people who find suspicious activity on their report) but even those who are unconcerned can still apply as a preemptive measure.
• Duration: This type of fraud alert spans for 90 days. After that, the alert will be removed from your credit reports. However, you can choose to reapply the alert as many times as you want, essentially ensuring that you are continuously protected. Note that if you apply online through Equifax, it gives you free access to the “Automatic Fraud Alert” feature, which automatically renews your fraud alert every 90 days on all your credit reports.

• Cost: There is no fee.

• Services Included:
  • A fraud alert message is placed on your credit report from all three credit bureaus.
  • Potential creditors are notified that they should further verify your identity.
  • You are given a free copy of your credit report from all three credit bureaus (in addition to the one you are entitled to per year, by law).

2. Extended Fraud Alert

• Eligibility: Only individuals who have been victims of identity theft before are eligible for placing this type of fraud alert.

• Duration: This type of fraud alert spans for 7 years.

• Cost: There is no fee.

• Services Included:
  • A fraud alert message is placed on your credit report from all three credit bureaus.
  • Potential creditors are personally required to verify your identity via telephone.
  • name is also removed from prescreened offers of credit or insurance for 5 years.
  • You are given two free copies of your credit report during your first 12 months, and then one per year thereafter from all three credit bureaus (in addition to the one you are entitled to per year, by law).

3. Active Duty Alert

• Eligibility: Only individuals who are on active military duty are eligible for placing this type of fraud alert. This is to minimize their risk of identity fraud while they are deployed.

• Duration: This type of fraud alert spans for 12 months.

• Cost: There is no fee.

• Services Included:
  • A fraud alert message is placed on your credit report from all three credit bureaus.
  • Potential creditors are notified that they should further verify your identity.
  • Your name is also removed from prescreened offers of credit or insurance for two years.
  • You are given a free copy of your credit report from all three credit bureaus (in addition to the one you are entitled to per year, by law).

How To Set Up Fraud Alerts

To set up your fraud alerts, you need to determine which of the three types you are eligible for, as everyone has different circumstances. Once you do, you can contact one of the three major credit bureaus (see below for contact information), as it will be responsible for notifying the remaining two. We recommend placing your fraud alert through Equifax in order to take advantage of the automatic 90-day renewals that it offers.

In order to reach the credit bureaus to place or remove the fraud alerts, you may choose to contact them via their respective websites, mailing addresses or phone numbers (Note: the Extended Fraud Alert requires submitting additional documents so mailing will be required):
 

Each credit bureau will require you to provide basic personally identifying information, such as:

• Full name
• Social Security Number (SSN)
• Date of birth
• Full address (current and previous)
• Email address
• Phone number

However, for the Extended Fraud Alert, you are required to submit additional documents:

• Proof of your identity theft report (this can be a copy of your valid police report, law enforcement agency report or US Postal Service report that alleges mail theft)

• Proof of your identity (this can be a copy of your Social Security Card, pay stub with your SSN or W2 Form)

• Proof of your current address (this can be a copy of your driver’s license, rental lease agreement/house deed, or pay stub with your address)

Pros and Cons: Should You Use Fraud Alerts?

Are fraud alerts suitable for me? Well, let’s examine the pros and cons.
Pros

• Free of Charge: All three types of fraud alerts are completely free of charge. No credit bureau charges for this service.

• Free Credit Reports: Depending on which type of fraud alert you place, you receive at least one free credit report from all three bureaus in addition to the one you are entitled to per year, by law. If you are eligible for the Extended Fraud Alert, you receive 8 additional credit reports from each credit bureau.

• Convenience: Initial and Active Duty Fraud Alerts can be placed and removed online from the comfort of your home. Additionally, Equifax offers the “Automatic Fraud Alert” feature, which saves you from manually renewing your alert every 90 days.

• Harmless: Adding fraud alerts to your credit report and receiving free copies of your report do not impact your credit score in any way.

Cons

• No Guarantee: Unfortunately, not all creditors or third parties performing credit checks will heed the fraud alerts, namely the Initial and Active Duty types. Because it is not guaranteed that they will take further steps to verify your identity, fraud alerts diminish but do not entirely preclude your likelihood of being an identity theft victim.

• Delays: Fraud alerts delay credit applications and transactions involving credit checks – though very marginally – as they add an extra step in the process. After all, in order for your potential creditors and third parties to verify further your identity, they will take a slightly longer time.

Now that we’ve covered the pros and cons of placing fraud alerts, the decision of whether or not to place a fraud alert is yours to make. Our recommendation is that if you have the slightest suspicion or concern about fraud, you should not only take advantage of the free additional security that a fraud alert provides, but also implement other fraud prevention measures such as a credit freeze. If not, then placing a fraud alert might not be worth the hassle.

Alternatives To Fraud Alerts

Although fraud alerts are one of the most convenient and cost-saving ways to reduce your chances of being a victim of identity fraud, there are still other options out there. Keep in mind that although some are costly and inconvenient, they provide better protection:

• Credit Monitoring: This is a service that is often offered for free but can otherwise cost up to $15 per month. It notifies you if any suspicious activity is being done to your credit, including: too many hard inquiries, new accounts being opened, changes to existing accounts, changes in address and new public records being released.

• Credit Freezes: A credit freeze prevents most third parties from gaining access to your credit report. Thus, it precludes fraudsters from using your personally identifying information to open financial accounts or make transactions that require a credit check under your name.

• Self-Monitoring: You have the right to view a free copy of each of your three major credit reports once every 12 months at www.AnnualCreditReport.com. It is important to track your credit history so always take advantage of this option.

• Other Cautionary Measures: There is a variety of other precautionary measures that you can take on a daily basis in order to protect your personal information, such as shredding your financial statements, locking your mailbox and exercising caution online and over the phone.

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