Your credit report and credit score figure heavily in your overall financial life. They’re worth the effort of protecting for several reasons. They can have an impact on the interest rates you’ll be offered on a mortgage, auto loan or credit card. They can also influence whether a landlord will rent to you and even whether you are offered a job you’ve applied for.
What is a credit report? Credit reports are documents created by credit bureaus — such as Equifax, FICO and Vantage — that summarize your credit activity and the diligence with which you pay your creditors on time and in keeping with the terms of your credit agreements. It’s a good idea to learn how to check your credit report and to do so regularly.
Credit reports also contain your credit score: all of your activity boiled down to a single grade. Different credit bureaus may figure your credit score differently, but in all cases, credit scores are based on all of the entries on your credit report. False entries can wreak havoc with your score and may be an indication that your identity has been stolen. Should you discover one on your credit report, it’s essential to take steps both to have it removed and prevent additional fraudulent entries from occurring. That’s where fraud alerts come in.
What is a fraud alert on a credit report?
A fraud alert is a notice you can place on your credit report that alerts creditors to take extra steps to verify your identity before opening a new account in your name. Placing a fraud alert on your credit report is a free service. It’s not difficult to do, but there are specific steps you must take to take advantage of the service.
Why is placing a fraud alert an effective way of dealing with inaccuracies in a credit report?
A fraud alert is like a red flag on your credit report. Once you file for one, it alerts creditors that they should take extra steps to verify your identity before extending credit. It’s a way of preventing an identity thief or other cyber criminal from opening new accounts in your name or making changes to your existing accounts. Therefore, it can protect your credit score from being decimated by fraudulent activity.
How to place a fraud alert on your credit report
Fraud alerts offer consumers many benefits when used judiciously. But it’s important to follow the proper steps when taking advantage of the device. The process can be broken down into three steps.
1. Contact the three major credit bureaus
There are dozens if not hundreds of credit bureaus out there. But for most consumers, there are three primary bureaus to take into consideration when filing a credit fraud alert: Experian, TransUnion and Equifax. These credit bureaus don’t necessarily talk to each other or share information. So if you suspect you’ve been a victim of fraud, it’s best to contact each one of them individually.
You can contact the three credit bureaus as follows:
- Online: You can place a fraud alert online through Equifax's website. To do this, you will need to create an account and provide some personal information, such as your name, address and date of birth.
- By phone: You can place a fraud alert by phone by calling Equifax's fraud alert line at 1-800-525-6285.
- By mail: You can place a fraud alert by mail by sending a letter to Equifax. The address is: Equifax Fraud Alert, PO Box 740256, Atlanta, GA 30374
- Online: Visit Experian’s website and create an account. The process is simple. You need only provide your contact information and date of birth.
- By phone: Call Experian at 888-397-3742. When you call, be sure to have your Social Security number on hand.
- By mail: You can file a fraud alert with Experian by writing a letter and mailing it to Experian Fraud Alert, PO Box 9554, Allen, TX 75013
- Online: The fastest way to file a fraud alert with TransUnion is to do so online at the company’s website. Again, you’ll need to open an account and provide your contact information and date of birth.
- By phone: Call TransUnion at 800-916-8800. Have your Social Security number on hand to complete the task.
- By mail: You can write a letter to TransUnion to request that a fraud alert be put on your report. The mailing address is TransUnion Fraud Alert, PO Box 16000, Chester, PA 19022
Should you decide to use the mail to request your fraud alert, be sure to include your name, address, date of birth and a copy of a government-issued ID, such as your driver’s license.
2. Choose the type and duration of the fraud alert
There are three different types of fraud alerts available. Your circumstances will determine which type of alert makes the most sense.
Initial fraud alert
If you’ve been the victim of fraud or if you learn that your data has been compromised — losing your wallet is a good reason and so is a data breach suffered by a company you do business with — it’s smart to file an initial fraud alert with all three major credit reporting agencies. Initial fraud alerts last one year but they can be renewed at the end of the one year period.
Extended fraud alert
An extended fraud alert is similar to an initial fraud alert, but it lasts seven years without renewal. It’s available to people who can demonstrate that they’ve been the victim of identity theft. To file for an extended fraud alert, you’ll be required to provide a copy of a police report or a report from the Federal Trade Commission (FTC) confirming identity theft.
Active duty military alert
An active duty military alert is a one-year alert that is available exclusively to active-duty military personnel and their dependents. To place an active duty fraud alert, you will need to provide a copy of your military identification card. Choose this alert if you’ve been the victim of fraud and meet the qualifications for current military service or dependence on a service person.
3. Get confirmation of the fraud alerting monitor your credit report
The easiest way to confirm that you have successfully placed a fraud alert on your credit report is to actively request a copy of your report. You can download free copies of your credit report once a year by visiting this link: https://www.consumer.ftc.gov/articles/0155-free-credit-reports
You can also contact the three credit reporting agencies by telephone at the numbers referenced above. You’ll need to provide identifying information when you call.
Once you’ve confirmed that a fraud alert has been placed on your report(s), it’s still important to monitor your credit frequently. You may find it helpful to sign with a company like Credit Karma or Credit Sesame, which provide free credit report monitoring in exchange for receiving advertising from various financial institutions. You can check your credit score daily through these services and view your credit report at will when you sign up for either of these services.
How to remove a fraud alert from your credit report
The process of removing a fraud alert from your credit report is similar to placing one. Here’s how to go about it.
1. Contact the credit bureaus and verify your identity
Choose a method of contacting the three major credit bureaus: online, by phone or by mail. Expect to provide identifying information, including your Social Security number and a government-issued ID, such as your driver’s license or passport number, to have the alert removed.
To contact each credit bureau by mail, you can use the following addresses:
- Equifax: Fraud Alert Removal, PO Box 740256, Atlanta, GA 30374
- Experian: Fraud Alert Removal, PO Box 9554, Allen, TX 75013
- TransUnion: Fraud Alert Removal, PO Box 16000, Chester, PA 19022
2. Specify the alert that you want to remove
Make sure you tell the credit bureaus which type of alert you want removed: initial, extended or active military.
3. Get confirmation of the removal and monitor your credit
You should follow the same procedure to confirm that your credit alert has been removed as you would for placing the alert on your account. Remember to check your credit report to confirm that the alert has been removed.
Fraud alert vs credit freeze
Some people mistake a fraud alert with placing a credit freeze on an account. But the two function differently. According to Experian, a fraud alert on your credit report(s) requires creditors to verify your identity before processing credit applications, while a credit freeze blocks creditors from accessing your credit report altogether for a period between one and seven years. Adding either to your account is free.
What can a credit freeze accomplish that a fraud alert cannot?
The main difference between the two is that, with a credit freeze, creditors will not be able to access your credit reports at all while it’s in place.
The downside to placing a credit freeze on your account is that, should you wish to apply for credit, creditors won’t be able to access your report. You must have a credit freeze removed or you’ll be unable to apply for a mortgage, personal loan or even a store credit card.
When should a consumer file a fraud alert with the credit bureaus?
You should file a fraud alert on your credit report any time you notice suspicious activity on your credit account statements or credit report. For example, you may see new accounts on your credit report that you haven’t opened. Or you may receive an actual bill from a creditor for purchases you didn’t make. Also, you may learn that your personally identifying information has been included in a data breach. Certainly, any time you suspect your identity has been stolen, you should file a fraud alert with the three major credit bureaus.
Does a fraud alert affect your credit score?
According to Equifax, placing a fraud alert on your credit report will not affect your credit score. However, fraudulent purchases made using your existing credit accounts can have a negative impact. That’s why it’s so important to monitor your credit statements and credit report — it’s critical that you address any unauthorized purchases with your creditors immediately.
Summary of Money's how to place or remove a fraud alert on your credit report
If you want to learn how to protect yourself online, it’s important to know how to use fraud alerts to your advantage. Here are the steps you must take to place or remove a fraud alert on your credit report:
- Be prepared to identify yourself by having a government-issued identification handy when you report fraudulent activity.
- Contact the three major credit bureaus to report that you suspect fraud and want to file a fraud alert or have one removed.
- Choose the type and duration of the type of fraud alert you wish to file if you’re adding one to your report.
- Confirm that the alert has been successfully placed on your credit report by checking with the three major credit bureaus and reviewing your credit report.