Fraud Alert on Credit Report

A fraud alert is a notice placed on a consumer's credit report that directs a business to take reasonable steps to verify the person's identity before extending credit or opening a new account. It is a free tool available under the federal Fair Credit Reporting Act. When a fraud alert is active, a business that requests a credit report must use reasonable procedures to confirm that the person making the request is the actual consumer, not someone impersonating them. The alert does not block access to the credit report, but it adds a verification step. It also does not affect a credit score, because it is not a factor in credit-scoring models. There are three main types of fraud alerts. An initial fraud alert lasts for one year and can be renewed. A consumer may place an initial alert if they suspect they are a victim of identity theft, even without a formal report. An extended fraud alert lasts for seven years and requires an identity theft report filed with a law enforcement agency or the Federal Trade Commission. An active duty alert is available to members of the military who are on active duty and away from their usual station; it lasts for one year and can be renewed. Each type has specific requirements and durations. To place a fraud alert, a consumer contacts any one of the three national credit reporting companies: Equifax, Experian, or TransUnion. That company must then notify the other two. The consumer must provide proof of identity, such as a government-issued identification card and a utility bill or other document. Placing, renewing, or removing a fraud alert is free. A fraud alert is different from a credit freeze, which restricts access to a credit report entirely. A freeze is generally stronger, while a fraud alert is a warning that prompts verification. A fraud alert is also different from credit monitoring, which is a service that notifies a consumer of changes to their report. The Fair Credit Reporting Act and the Fair and Accurate Credit Transactions Act establish the rules for fraud alerts. An extended fraud alert also allows a consumer to request that their name be excluded from prescreened credit and insurance offers for five years. A fraud alert does not prevent all fraudulent activity. It is one part of a broader response to suspected identity theft, which may include reviewing credit reports and filing an identity theft report. A consumer can remove a fraud alert at any time by contacting the credit reporting companies.

A person who suspects identity theft may contact one national credit reporting company to request an initial fraud alert, which then must be shared with the other nationwide companies.