Placing fraud alerts or fraud warnings on your credit reports is a good identity theft prevention control. You need to place them on your credit reports as soon as you discover or even suspect possible identity theft. There are currently two types of alerts that you can place on your credit reports; initial alert and extended alert.
The purpose of the alerts placed on your credit reports is to alert the businesses which do business with you regarding your possible identity theft and fraud case and encourage them to contact you and confirm your identity if a transaction is initiated under your name. This is to make sure someone else is not getting loans or opening new credit accounts under your name for example. Although this may not be effective in stopping your identity theft if businesses do not contact you to validate your identity, you may have legal options in case of an identity theft if it occurs after you placed the alerts. Plus, it's better than having no control at all. To validate your identity, businesses will call you at home or your business number available on your credit files. That’s why it’s a good idea to have your current phone number properly listed and validated with the credit reporting agencies to help businesses find you as quickly as possible.
You may place a fraud warning by contacting the credit reporting agencies and it may take them 24 hours to activate the alert on your credit files and send you the confirmation.
An initial alert placed with any of the 3 credit reporting agencies stays on your credit report for 90 days and you should typically place an initial alert when you suspect you are a victim of identity theft or are even about to become one. It’s a very good idea to place an initial alert if and when you lose your identity cards, passport, wallet or any other identity component, which cannot be readily found. Although, the credit agency where you placed your fraud alert is required to share the information with the other 2 agencies, it’s always a good idea to contact the other ones as well and place separate alerts just in case there is a failure in the process which I’m sure is extremely rare, right? I mentioned placing an initial alert on your credit report is a good idea when you suspect someone is either using or even considers using your financial identity, and I also suggested placing fraud alerts when you lose your personal information like a credit card to prevent potential identity theft. What I would also add to my statements is to place a fraud alert on your credit reports at all 3 agencies regardless of your suspicions of someone using your identity or whether you have lost your personal information because I just think that businesses should validate an identity before completing transactions anyway and they need to be reminded if they forget to do so. You should consider placing a fraud alert and then renewing that alert every 90 days. This way, you know for sure creditors are warned to contact and validate your identity before granting credit by opening new accounts. If you're worried about remembering when to renew, don't worry, many companies now provide automated services to place and renew the alerts. This is the latest control and most effective in preventing identity theft other than credit or security freeze implemented in some states and being considered in others which will require your involvement to lift the freeze before agencies can release your credit reports to creditors.
Placing fraud warning or alerts on your credit files is a great way to prevent credit identity theft if businesses take them seriously and some identity theft prevention services sold in the market these days can place the alerts for you and automatically renew the alert every 90 days for a fee. So, if you have tendency to forget or have little time for placing and renewing fraud alerts, consider subscribing to such services which according to recent statistics greatly reduce the risk of identity theft by asking creditors to contact you in order to open new accounts or extend existing credit limits. The only problem with fraud alerts in my opinion is that businesses may not take the alerts seriously enough to validate identities before granting credit as more people routinely place them these days, although I think it makes a of business sense to do so. However, the Red Flags Rule clearly requires businesses to take them seriously and verify identities before granting a new line of credit.
You can place your free initial fraud alert at either or both links below:
Equifax Fraud Website
TransUnion Fraud Website
You can also place an extended alert on your credit reports when in fact you have become an identity theft victim. To place an extended fraud alert, you will need an identity theft report. The extended alert will stay on your report for 7 years, but don't worry; you can remove the alerts at any time by contacting the agencies. An extended report also entitles you to 2 free credit reports from each one of the 3 agencies.
Learn why credit freeze may be a better option than fraud alerts for some people.