Definition of Fraud Alert

A fraud alert can be placed on your credit report to prevent new accounts from being opened in your name without your consent. By contacting the three major credit bureaus, you can protect yourself if you think you've been a victim of identity theft.

Function

The fraud alert tells lenders that fraud has occurred or may occur in your name and requires them to take steps to verify identity before extending credit or opening new accounts.

Types

The initial fraud alert appears on your credit reports for at least 90 days and can be placed even if fraud is only suspected. The extended alert remains for seven years, but proof of fraud must be provided through an Identity Theft Report, an official police report of the crime.

Placing a Fraud Alert

A fraud alert can be placed through any of the major credit bureaus--Experian, Equifax and TransUnion. The bureau you contact will report your information to the other two bureaus.

Benefits

Both types of fraud alert entitle you to free credit reports from each bureau. You may also opt to have only the last four digits of your Social Security number appear on your reports.

History

Fraud alerts are a provision of the Fair and Accurate Credit Transactions Act of 2003, an amendment of the Fair Credit Reporting Act.