Reviewed by Sep 30, 2020| Updated on
A credit fraud alert refers to a notice to a credit reporting office that the identity of a consumer may have been stolen. Further, an application for new credit may not be legitimate in the name of the consumer.
An entity may send a credit fraud notice to the credit reporting offices at no charge to the person who submits it. The person will be required to provide proof of identity to complete this procedure so that the credit reporting office will confirm that the request is legitimate.
There are three kinds of credit fraud alerts. An initial warning is valid for 90 days, and then can be renewed for a 90-day term. An extended notice is valid for seven years and allows you to file a police report to the credit offices notifying them that you were a victim of identity fraud and reporting the crime to the authorities.
People generally file credit fraud alerts when they believe they are or could be the victim of identity theft, or when their information has been compromised as part of a data breach.
Once the credit fraud alert is in effect, if someone, including you, tries to apply for credit, the financial institution that receives the credit request is required to take extra action to verify the identity of the applicant and ensure that the request actually comes from the person listed on the document.
So, if you try to open a new account yourself, a fraud warning can create a bit of a hassle, but it can also create enough trouble to keep a criminal from opening a fake account on your behalf. With even greater security, consider a credit freeze when you are certain that your identity has been stolen.