When Should I Place a Fraud Alert?

You should place a fraud alert if you believe you are a victim of fraud or may become one, if you are a victim of identity theft or if you want to prevent your identity from being stolen. You don’t necessarily have to be a victim of fraud to place a fraud alert, you can also place a fraud alert as a security precaution. 

Continue reading to learn more about what a fraud alert is, how it differs from a credit freeze and how to place a fraud alert on your credit report. 

What Is a Fraud Alert?

A fraud alert is a free notice you can add to your credit report that requires you to verify your identity before you’re able to take out a loan under your name. Fraud alerts act as a second form of authentication to ensure that only you have the ability to take out loans or open credit accounts under your name, no one else. 

There are three types of fraud alerts: initial fraud alert, extended fraud alert and active duty alert. 

• Initial fraud alert: An initial fraud alert, also known as a temporary fraud alert, only lasts one year and expires after the year has passed. This type of fraud alert can be added to your credit report at any time and can be renewed as many times as you’d like. To initiate this type of fraud alert you’ll need to contact a credit bureau. 
• Extended fraud alert: An extended fraud alert lasts for seven years and was created for individuals who have been victims of identity theft or other types of fraud. To enable this type of fraud alert, you need to submit a copy of the fraud report you filed with law enforcement or the Identity Theft Report you submitted to the Federal Trade Commission (FTC). 
• Active duty alert: An active duty alert is for individuals who are currently on active military duty. This fraud alert lasts for one year and can be removed at any time. 

Fraud Alert vs Credit Freeze: What’s the Difference?

The main difference between a fraud alert and a credit freeze is that a fraud alert requires that creditors and lenders verify your identity before they can process a loan or credit application under your name, whereas a credit freeze prevents creditors and lenders from being able to access your credit report at all. 

Another difference between a fraud alert and a credit freeze is that you only need to contact one of the three major credit bureaus to place a fraud alert: Experian, TransUnion or Equifax. This differs from a credit freeze where you’ll need to contact each of the three credit bureaus individually to freeze your credit report. 

When To Place a Fraud Alert

There are three main circumstances in which you should place a fraud alert: if you believe you’re a victim of fraud or are going to become one, if you’re a victim of identity theft or if you just want to keep your identity safe from theft. 

You believe you’ve been a victim of fraud or will become a victim 

If you’re not sure you’re a victim of fraud, but something occurred that makes you believe you might become a victim soon, placing a fraud alert can help you mitigate the risks of fraud. For example, if a company you have an account with experiences a data breach, there’s a possibility you might become a victim of identity theft. Placing a fraud alert in a scenario like this can help keep you safe by mitigating the risk of identity theft. 

You’re a victim of identity theft

Identity theft is when someone steals and uses your Personally Identifiable Information (PII) to impersonate you so they can commit fraud. There are many types of identity theft including financial fraud, account takeover attacks, tax ID theft, medical ID theft and more. 

If you ever become a victim of identity theft, it’s important to take steps to prevent it from escalating further by placing a fraud alert on your credit report. 

You want to keep your identity safe 

You don’t necessarily have to be at risk or a victim of identity theft to place a fraud alert on your credit report. You can also place a fraud alert as a security precaution to prevent anyone from taking out loans or opening credit accounts under your name. If this is the case, you’ll need to place an initial fraud alert on your credit report and renew it every year for as long as you want the fraud alert to remain active. 

How To Place a Fraud Alert

Before you place a fraud alert on your credit report, first determine which type of fraud alert you want to place. If you’re placing an extended fraud alert, make sure you have already reported your identity theft to law enforcement or the FTC, as you’ll need to have a copy of this report ready to place this type of alert on your credit report. 

Once you’ve determined the type of fraud alert you want to place, contact one of the three major credit bureaus: Experian, TransUnion or Equifax. You only need to contact one bureau to place the fraud alert. The bureau you contact will notify the other two bureaus to place the fraud alert on your credit report. Once you’ve placed a fraud alert, you’ll be able to remove it whenever you’d like. 

Keep Yourself Safe From Fraud 

A fraud alert is just one of the steps you should take to keep yourself safe from all types of fraud. In addition to placing a fraud alert on your credit report, be sure to secure each of your online accounts with strong passwords and Multi-Factor Authentication (MFA). 

The more aware you are of how to prevent fraud, the better protected you’ll be from becoming a victim. Learn more fraud prevention tips to keep yourself safe.