November 1, 2018
You probably know that you can place a fraud alert on your credit reports – but did you know there are three different types of fraud alerts that you can apply?
A fraud alert obligates potential creditors to verify the identity of anyone asking for credit in your name. Any fraud alert that is placed with one of the three main credit reporting agencies (Equifax, Experian, and TransUnion) will be forwarded and applied to the other two credit reporting agencies.
Fraud alerts are easily applied online, by phone, or by mail – but which type of fraud alert should you apply?
If you think your information may be exposed and you're vulnerable to fraud, but you haven't suffered any losses yet, apply an initial fraud alert as a pre-emptive measure. A recent amendment of the Fair Credit Reporting Act extended the initial fraud time period from ninety days to one year. You'll receive one free credit report from each of the agencies as part of your alert.
An active-duty alert is a form of initial fraud alert designed for active-duty military members. It has always lasted for one year and was created because of the added difficulty of detecting, documenting, and correcting fraudulent activity when you're on active-duty status. The recent change extends the same time courtesy to all Americans.
When you're a confirmed victim of fraud, you may apply an extended fraud alert that lasts for seven years. To confirm the losses, you'll need to file a police report with your local law enforcement agency or file an identity theft report with the Federal Trade Commission (FTC).
Once you have the confirming reports, download an extended fraud alert form from one of the agencies and return it along with photocopies of the confirming reports and documents confirming identity and address. The extended fraud alert application form will tell you which forms of identification are suitable.
With an extended fraud alert, you're entitled to two free credit reports from each of the three credit reporting agencies in the first year of the alert. You can check your credit score and read your credit report for free within minutes by joining MoneyTips.
Your fraud alert choices are fairly straightforward. If you suspect your information has been compromised but you aren't a confirmed victim of identity theft, apply an initial fraud alert, or an active-duty alert if you are an active military member. If you've fallen victim to identity theft, place an extended fraud alert – but remember to file the appropriate FTC form and police report.
You can renew an initial or active-duty fraud alert at the one-year mark, or simply let the alert expire. Keep track of the effective date and set a reminder to renew at the end of the one-year period.
You can also remove your fraud alert at any time by contacting one of the credit reporting agencies - but why would you? It doesn't cause any harm to leave the protection in place.
If you want greater protection against fraudulent accounts in your name, consider applying a credit freeze to your credit file with each credit bureau. A credit freeze stops potential creditors from accessing your credit report at all. If creditors can't assess your risk, they won't approve credit. There's no cost – the same rule that extended initial fraud alerts to one year made credit freezes (and thaws) free of charge.
Finally, note that neither a fraud alert nor a credit freeze stops criminals from abusing your existing accounts. Protect your existing account information by regularly reading over your credit report as well as changing passwords and logins to thwart thieves that may already have your information. You can read your credit report and see your credit score for free within minutes by joining MoneyTipsMoneyTips.
Photo ©iStockphoto.com/ArisSu
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