Credit Bureaus and Fraud Alerts

Identity theft is a harsh reality in a world of debit cards, credit cards, and online banking. If you’ve been a victim, you know the importance of protecting yourself from future infractions. A little-known solution is available through the credit bureaus: fraud alerts. If you want to avoid identity theft, review the information below and take the crucial first steps.

What is a Fraud Alert?

For anyone who has dealt with the aftermath of identity theft, fraud alerts are a useful way to ensure future security. By initiating these alerts with the credit bureaus, lenders are required to contact you by phone or other means to authorize new lines of credit or the use of your name on applications. If they cannot reach you, the application or credit activation will be denied and flagged for fraud. This process ensures your awareness of any and all activity on your account, and will help you recognize when fraud is being committed in your name.

What Are the Disadvantages?

While fraud alerts can protect you from identity theft, the convenience of instant credit authorization becomes a thing of the past. Unless you are available by phone to confirm your credit application, you may have to wait a day or two to make an in-store purchase. For example, Emma is shopping for a new sofa and wants to get 10 percent off by opening a department store credit card. Although her credit score is acceptable, the fraud alert requires the lender to contact her by phone to authorize the new line of credit. If her cell phone is listed as her primary contact, she won’t have to wait. However, if her home phone is her primary number, she may face a short delay in completing her purchase. Despite this minor inconvenience, those who seek fraud alerts are likely to weigh the benefits over the drawbacks.

How to Set it Up

Once you have decided to set up fraud alerts, it is up to you to take the first step. While some claim that the credit bureaus work together to maintain fraud alerts, the best way to avoid identity theft is to contact Experian, TransUnion, and Equifax individually. The process is simple and should only take a few minutes to complete. Depending on the bureau, your alerts may expire after 90 days, so it is imperative to reactivate them periodically to ensure your protection.

What Happens Next?

You should receive a confirmation letter within a week or two of setting up your fraud alerts. If not, make sure to call the credit bureaus to verify your alerts. With fraud alerts attached to your credit report:

  • Your name will be removed from pre-approved offer lists, such as credit cards and insurance offers.
  • You may become eligible for an extended victim statement status, which will keep your fraud alerts in place for seven years. This process requires approval from each credit bureau.

Although it is difficult to protect yourself from identity theft entirely, fraud alerts are a strong first line of defense. By working with the credit bureaus and taking a proactive stance, your credit report is more likely to be shielded from modern-day theft.