Credit Bureau Fraud Alerts Help Thwart Identity Theft

It may begin with confusing collection calls for debts you don't owe and quickly progress to credit damage, application denials and even lawsuits. It's identity theft--and no one is safe. Even if you take extreme measures to prevent your personal information from falling into the wrong hands, identity thieves often scour public records for the names and Social Security numbers of potential victims. You may have no control over who accesses public records about you, but you can request a warning whenever a lender pulls your credit report. This can help avert a credit related identity theft by notifying you that someone is attempting to obtain credit in your name and gives you the chance to stop it from occurring.

Fraud alerts can help protect you from becoming an identity theft victim by placing a notation on your credit report from each credit bureau instructing creditors to contact you by phone to verify that you have, in fact, authorized a credit check. Additionally, a fraud alert is free and poses no obstacle when you decide to legitimately apply for a new loan or credit card.  In a perfect world; should an identity thief apply for credit in your name, a quick telephone call from the creditor due to a fraud alert observed on your credit file could stop a thief in his or her tracks. Trouble is, we all know: we don't live in a perfect world. Don't allow the fact that you have a fraud alert on file with the credit bureaus lull you into a false sense of security. While fraud alerts have the potential of blocking some credit related identity theft incidents, they aren't foolproof because there is no law requiring lenders to telephone you before extending credit in your name--no matter if you have placed fraud alerts in your credit file requesting them to do so.

As a rule, the credit bureaus do not share consumer information with one another unless an individual requests a fraud alert. If you decide to make the request, however, informing only one credit bureau may not be enough. Although the credit bureaus claim to cooperate with one another to help prevent identity theft, the only way of knowing for sure that you have a fraud alert on file with each credit bureau is to notify each bureau separately. You may file fraud alerts with both Experian and Equifax online. TransUnion does not offer online alerts, but you may request a fraud alert either via telephone or by mail. Fraud alerts must be renewed every 90 days.

By regularly reviewing your credit reports, you can determine who accesses your files and when. If you notice that a lender pulled your credit without your permission, you may contact the lender to determine the reason for the unauthorized inquiry.  While a fraud alert permits creditors to get your report as long as they take steps to verify your identity, a credit freeze stops all access to your credit report. A credit freeze is different than a fraud alert in a number of ways.

Although the credit bureaus' fraud alert system isn't flawless, it's an option for those with concerns about identity theft, looking for no-cost ways to help protect their credit. For those people who are willing to pay a little bit for extra security, by all means, a full credit freeze is the better option. Coupled with regular credit report monitoring and taking care to protect your personal information, a credit freeze can be very effective at protecting your money and your good name.