Fraud Alert: A New Tool To Protect Your Credit

Anyone worried that their financial information has been misused has good news: they now have the ability to place a Fraud Alert on their credit file.

Fraud alerts are used to stop others from opening accounts in your name and are a red flag that appears on your credit report. Businesses cannot view this file without authorization, so call one of the three credit bureaus and request an alert; one will be attached within 24 hours to your file, plus any pre-approved credit or insurance applications for two years will also be removed from consideration.

Types Of Fraud Alerts
After 90 days, an "Initial Alert" will remain on your credit reports. This alert serves to notify creditors if someone has access to personal information such as your Social Security Number or birthdate. Potential creditors must then verify your identity through the establishment of this initial alert before extending credit; providing you with a phone number that can be reached quickly. Furthermore, having this alert in place ensures that no one else opens accounts in your name.

If your identity has been stolen, an "Extended Alert" is recommended. This will guarantee that your credit file remains protected for seven years and remove your name from marketing lists for prescreened credit offers for five years. To be eligible for an extended fraud alert you must provide evidence such as a police record.

Active duty military personnel have access to a "Military Fraud Alarm." This alert helps protect members of active duty by stopping anyone from opening an account in their name while away on leave.

These tips can be very beneficial.

Experian, Equifax and Trans-Union - three credit reporting agency agencies - collaborate and share data. Once one company calls another, the other two will also be alerted.

Be sure to notify your lender if you need a loan while your credit file remains under review.

To request the removal of a fraud alert from your credit reporting agencies, you must write them directly.