Credit Report Fraud

By: EconomyWatch   Date: 25 August 2009

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Credit report fraud is a rampant issue, especially when carried out through online resources. A large number of dubious websites offer free credit reports to lure individuals to furnish their personal details, leading to identity theft. Hence, one needs to maintain utmost caution while applying for and accessing credit reports online.

Credit Report Fraud Alert

A fraud alert is a notice on your credit report, authorized by the Fair Credit Reporting Act, which implies that your personal information may have been compromised. This helps in communicating with potential creditors about the fraud and requesting them to verify your identity separately before advancing credit in your name. A fraud alert can be placed on your credit report for free.

There are two kinds of fraud alert:

Initial fraud alert: This stays on the credit report for 90 days and is appropriate in case you face a ‘phishing’ scam or lose your wallet. If you put an initial fraud alert on your credit report, potential creditors are required to verify your information as a part of the reasonable policies and procedures related laws. You are entitled to receive one free copy of your credit report from the three major credit report bureaus, Equifax, Experian and Trans Union. Try and request them to display just the last four digits of your Social Security number on your report for added security. Moreover, an initial credit report fraud alert can be renewed indefinitely.

Extended fraud alert: This alert can be placed on your credit reported if you have become a victim of identity theft, provided you furnish an Identity Theft Report to the credit bureau. It stays on your report for seven years. Once you have placed this alert, you are entitled to two free credit reports from each of the three major credit bureaus.

A potential creditor can access your credit report even with the fraud alert, as long as proper verification steps are complied with. If you seek full security, create a credit freeze on your report, which completely blocks the access to your files. The credit freeze that you place on your report remains in effect till you either remove it or temporarily lift it.


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