Fraud alerts and how they work

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Fraud Alerts are like 'red flags' for anyone looking at your credit file. They signal to credit grantors that you may have been a victim of suspicious activity. Fraud Alerts alert creditors to take extra steps to verify the legitimacy of a request for new credit, extension of credit on an existing account, or issuance of an additional card on an existing account.

Fraud Alerts

  • Do not prevent third parties from viewing your credit file; however third parties are required to take certain steps to verify that you have authorized the activity on your account if they see a fraud alert on the credit file.
  • Still provide lenders with access to credit files and the ability to give credit to anyone they wish.

What’s the difference between a credit freeze and a fraud alert?

A credit freeze locks down your credit. A fraud alert allows creditors to get a copy of your credit report as long as they take steps to verify your identity. For example, if you provide a telephone number, the business must call you to verify whether you are the person making the credit request. Fraud alerts may be effective at stopping someone from opening new credit accounts in your name, but they may not prevent the misuse of your existing accounts. You still need to monitor all bank, credit card and insurance statements for fraudulent transactions.

Three types of fraud alerts are available:

  • Initial Fraud Alert. If you're concerned about identity theft, but haven't yet become a victim, this fraud alert will protect your credit from unverified access for at least 90 days. You may want to place a fraud alert on your file if your wallet, Social Security card, or other personal, financial or account information are lost or stolen.
  • Extended Fraud Alert. For victims of identity theft, an extended fraud alert will protect your credit for seven years.
  • Active Duty Military Alert. For those in the military who want to protect their credit while deployed, this fraud alert lasts for one year.

To file a fraud alert, call one of the three credit bureaus and tell them you would like to file a fraud alert. The credit bureaus will not charge you to file a fraud alert. The bureau that you call is required to contact the other two bureaus. The alert lasts for 90 days. If you wish to extend the alert, you will need to call again after 90 days. 

Security Freezes and How They Work

Many (but not all) states allow you to place a Security Freeze on your credit file for free or for a reduced fee. A Security Freeze will put your credit file 'on ice' by preventing the information in your credit file from being reported to third parties, such as credit grantors and other companies. With a Security Freeze, lenders will not be able to gain access to your credit file unless you give permission by "thawing" the frozen file using a secret code, similar to a PIN number. This means that it's unlikely that an identity thief would be able to open a new account in your name. 

You will need to contact each credit reporting agency:

Security Freezes

  • Block your credit file from being disclosed to third parties (except as noted above). Should you wish to apply for a loan or service you must be proactive in requesting a lift in the security freeze so that the necessary third parties will be able to view the credit file if the file is frozen (except those exempted by law).
  • Remain on your credit file until you decide to remove or lift it.
  • Give you more control over who looks at your credit file.
  • May require a payment, based on the state in which you reside, to place and/or lift the freeze.
  • Are an effective way to prevent an identity thief from opening most new accounts in your name. However, a Security Freeze cannot prevent all types of identity theft. For example, a Security Freeze will not prevent an identity thief from using your existing credit cards or other accounts.