fraud alertIn this day and age, as data breaches and identity theft run rampant, it helps to have some degree of protection. While identity theft protection or credit monitoring are definitely good tools to have, credit bureaus also provide additional protection to consumers by allowing them to place freezes and alerts on their credit files. While we already dug into credit freezes and how they can help protect your credit reports, you might not know there’s a less-aggressive option called a fraud alert.

What is a fraud alert?

Unlike a credit freeze that completely locks down your credit reports, a fraud alert is a less restrictive form of credit protection. Typically, fraud alerts are 90-day status changes to your credit report which notify creditors that you’ve either experienced or are especially susceptible to identity theft. The alert is a signal to creditors indicating they should take extra steps to verify all requests for inquiries before opening new lines of credit, issuing replacement cards or approving requests for a credit limit increase. When you place the fraud alert, you’ll provide the credit bureaus (TransUnion, Experian and Equifax) with your contact information, which will be used to verify your identity. Placing a fraud alert allows you to be aware of any attempts to open credit or to modify existing lines of credit.

What are the benefits of a fraud alert?

Ultimately, fraud alerts serve as a way of protecting your credit and identity while allowing creditors to still have access – unlike freezes which lock up your credit completely. Keep in mind, however, that fraud alerts slow down the process of obtaining new credit because of the additional step to verify your identity. While the initial duration of a fraud alert is 90 days, you can always renew it. Alternatively, if you’ve been a victim of identity theft and have an identity theft report — meaning you’ve submitted a complaint to the FTC, filed a police report and attached the two documents together — you can request an extended alert which will last seven years. The extended alert also includes the removal of your name from any prescreened offers mailing lists. This serves not only to cut down on the amount of your junk mail, but removing your name from this list helps protect your identity. If you don’t qualify for an extended fraud alert but want to opt out of prescreened credit offers, you can do it yourself.

An added benefit of placing a fraud alert is you get one extra free copy of all three of your credit reports, in addition to the one you’re entitled every year to through AnnualCreditReport.com, which will be a convenient way of verifying the status of your credit and the accuracy of your credit reports. Additionally, unlike credit freezes, placing a fraud alert is free.

Similar protection exists for military personnel, called an Active Duty Alert. This alert has many of the same features of the standard fraud alert, however, it lasts for an entire year and can be renewed to match the period of deployment. It also includes removal from prescreened offers mailing lists for two years.

How can I place a fraud alert on my credit reports?

You can place a fraud alert on your credit reports by contacting the bureaus themselves either by phone, mail or their respective websites. The good news is you only have to contact one bureau, as law requires whichever bureau you first contact to notify the other two. The fraud alert should appear on your credit reports within 24 hours of requesting it. Don’t forget that most fraud alerts will expire within 90 days. This means you’ll have to place a new one after the time is expired. As such, it may be wise to mark your calendar for when you’ll need to call and place another fraud alert. If you want extra help managing or requesting fraud alerts, you may want to consider signing up for a credit monitoring service, as most of the top-rated services not only allow remind you if your fraud alert is set to expire, but also may help you place an alert on your credit reports.

If you decide to cancel a fraud alert for any reason, you can either let it expire on its own or contact the bureau that you opened the alert with. In the case of Experian and Equifax, this process has to be done via request in writing, whereas TransUnion has an online web page dedicated to this process.

What are the limitations of a fraud alert?

Fraud alerts are simply just that, alerts. They don’t actively lock up your credit, which means there is room for error, like if a creditor intentionally or unintentionally opens up a credit account in your name without verifying your identity. If you’re looking for something a little more permanent, a credit freeze may be a better bet.

Another thing to note is that since fraud alerts and credit freezes show up exclusively on credit reports, they won’t protect you from other types of fraud that can be done in your name, such as tax fraud or the breach of your credit card information. That’s where an identity theft protection service can help pick up the slack. These services not only track the activity on your credit reports, but most also monitor the use of your personal information on public records as well as black market websites and chat rooms. If your information is spotted on either, you will be alerted as well as provided with directions as to how you can alleviate the situation.

Read our identity theft protection reviews to learn more about the top options and follow our credit monitoring blog to learn more about keeping tabs on your credit reports and scores.