Fraud alerts and security freezes are ways to protect yourself from identity theft and protect your credit score, but do you know how to use these protective measures and which one you might need?
Understanding the differences
Let’s think of fraudulent acts as injuries to your credit. Some injuries are little, while others require major treatment. One way to protect yourself from harm is to prepare what we’ll call your emergency anti-fraud kit. This kit basically has two tools in it should you come across acts that are indicative of fraud on your credit report: fraud alerts (initial and extended) and security freezes.
Fraud alerts are more commonly used than security freezes, but they may not be as effective in preventing new accounts from being opened in your name should a real identity theft problem arise. You should continue to check your credit report regularly by accessing your free annual report at annualcreditreport.com or by purchasing an Equifax Credit Report or one of the products available from Equifax Personal Solutions.
How fraud alerts work
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 let creditors know 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.
- Are free.
The three main types of fraud alerts and the lengths of their effectiveness
- Initial fraud alert: 90 days
- Active duty alert: one year
- Extended fraud alert: seven years
Equifax can place an initial fraud alert on your credit file that is effective for 90 days if you believe that you may have been a victim of fraud or are at risk of being a victim. With an initial fraud alert, when you or someone else attempts to open a credit account in your name, increase the credit limit on an existing account, or obtain a new card on an existing account, the lender should take steps to verify that you have authorized the request.
When you place an initial fraud alert on your credit report, you’re entitled to order one free credit report from each of the three nationwide consumer reporting companies, and, if you ask, only the last four digits of your Social Security number will appear on your credit reports.
You may be eligible to place a military/active duty alert if you have been called to active duty military service away from your usual duty post. This type of alert is similar to the initial fraud alert, except that it will remain on your file for 12 months, and it removes your name from pre-screened offers of credit for two years.
If you discover evidence of fraud or know that you are a victim, you may also place an extended fraud alert, which stays on your credit file for seven years and which requires creditors to verify your request by contacting you on the telephone number(s) you provide to the credit reporting agency when you request the alert.
To place an extended fraud alert, you will need to write to one of the nationwide credit reporting agencies and provide a valid police report showing that you have been the victim of identity theft (called an “identity theft report”) as well as a day and evening telephone number. The requirements for an identity theft report are listed on the FTC’s website. With an extended fraud alert, you may request two additional free credit file disclosures, and your name is removed from prescreened offers of credit or insurance for five years.
For any of these alerts, you will receive a confirmation when the alert is added to your credit file. Equifax will automatically forward any of your fraud or active duty alerts to the other two credit reporting bureaus, and the alerts will generally be placed on your credit file within 24 hours.
The information contained in this blog post is designed to generally educate and inform visitors to the Equifax Finance Blog. The blog posts do not give, and should not be assumed to provide, personalized tax, investment, real estate, legal, retirement, credit, personal financial, or other professional advice. Before making any financial decision, you should always consult with the appropriate professionals who can explain your options, rights, and legal responsibilities, and advise you on any tax, legal, credit, or business implications that may result from those decisions. The views and opinions expressed by the authors of blog posts are their own views and may not be the views or opinions of Equifax, Inc. and/or its affiliates.