Fraud Alert
What Is a Fraud Alert?
A fraud alert is a notification placed on a consumer’s credit report that warns lenders and creditors that the person may be a victim of identity theft or fraud. When a fraud alert is active, lenders are encouraged to take extra steps to verify a person’s identity before approving new credit accounts.
Fraud alerts are designed to help prevent criminals from opening credit accounts using stolen personal information.
Why It Matters
If someone steals your personal information, they may attempt to open credit cards or loans in your name. A fraud alert helps reduce this risk by signaling to lenders that additional identity verification is required.
Fraud alerts can also give individuals time to investigate suspicious activity and take steps to secure their financial accounts.
How Fraud Alerts Work
Consumers can request a fraud alert from any of the major credit bureaus. Once placed, the bureau typically notifies the other credit bureaus as well.
Types of fraud alerts may include:
- initial fraud alerts lasting one year
- extended fraud alerts lasting up to seven years for confirmed identity theft victims
- active duty alerts for military personnel
During this time, lenders should verify the consumer’s identity before extending credit.
Example
After noticing suspicious credit inquiries on her report, a consumer places a fraud alert with a credit bureau so lenders must confirm her identity before approving new credit.
Fraud Alert vs Credit Freeze
- A fraud alert warns lenders to verify identity before issuing credit.
- A credit freeze completely blocks access to a credit report unless the consumer temporarily lifts the freeze.
FAQs About Fraud Alerts
Do fraud alerts affect credit scores?
No. Fraud alerts do not impact credit scores.
How do consumers place a fraud alert?
By contacting one of the major credit bureaus.
Are fraud alerts free?
Yes. Credit bureaus allow consumers to place fraud alerts at no cost.
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