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What Is a Fraud Alert for Your Credit Report?

How can you be sure you haven't been the victim of credit fraud? Money Girl answers a reader question.

By
Laura Adams, MBA,
November 17, 2012

What Is a Fraud Alert for Your Credit Report?

by Laura Adams

A Money Girl reader named Trey G. asks:

“I found your Credit Score Survival Kit incredibly helpful—I had no idea that I could get my credit report and credit score for free! After reviewing my credit information for the very first time, I found that I have errors and a low score though I’ve never missed a payment on a credit account. I’m disputing the errors, but want to know if I can get my information again for free to make sure my report is corrected and that I haven’t been the victim of fraud?”

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ANSWER:

There are 3 national credit reporting agencies: Experian, Equifax, and TransUnion. They receive data from various creditors, service providers, and public records to maintain your credit history.

The credit agencies make your credit report available to creditors, employers, and other people and businesses as permitted by law. Therefore, it’s important to check your credit report so you know what others can see about you.

You’re legally entitled to request a free copy of your credit report from each of the agencies every 12 months at annualcreditreport.com. But what if you’re like Trey and want additional reports before 12 months are up?

If you already requested your free credit reports, you can visit the credit agency websites and purchase reports for about $10 each. There’s also a 3-in-one report offered by each agency that gives you all of your reports for about $40.

What Is a Fraud Alert?

However, if you suspect that information in your credit report is inaccurate due to fraud, the Fair Credit Reporting Act gives you the right to get free reports sooner than 12 months by adding a fraud alert to your credit file.

You can add a fraud alert for free at any of the agency websites. They must share the alert with the other 2 agencies, so you only have to add it one time. Having a fraud alert has no negative effect on your credit scores.

There are two types of fraud alerts: an initial alert and an extended alert.

  • Initial fraud alert: notifies potential creditors that you might be a victim of identity theft and asks them to verify your identity before extending credit in your name. This precaution should stop a criminal who is trying to use your personal information without your consent. If you don’t find evidence of fraud, you can remove the alert or let it expire after 90 days.

  • Extended fraud alert: is important if you do find evidence of fraud. It requires a victim statement for your file from a police report or other valid identity theft report. It requests that potential creditors contact you directly before opening credit in your name and remains in your credit file for 7 years or until you ask that it be removed.

Regularly keeping tabs on your credit report is one of the best ways to know if you’ve been the victim of fraud or identity theft.

Other Articles and Resources You Might Like:
Best Tips to Improve Your Credit Score
7 Steps to Check and Correct Your Credit Report
Get Your Free Credit Score (Without Hurting Your Credit)
Credit Score Survival Kit – a free video tutorial to improve your credit!

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