How to Set Up a Credit Fraud Alert in 3 Easy Steps

A fraud alert can prevent you from becoming a victim, and is easier to set up than you may think.

A cyber criminal wearing a hoodie and using a laptop.
A cyber criminal wearing a hoodie and using a laptop.

Image source: Getty Images.

A fraud alert is a proactive and free step you can take to protect yourself against identity theft. By placing an initial fraud alert on your credit report, it makes it more difficult for criminals to open new accounts in your name.

Once a fraud alert is placed on your credit report, it will be visible to any lenders that check your credit. Generally, when a fraud alert is detected, a lender must take additional steps to verify that it’s actually you who is opening the account. For example, a lender may contact you at a phone number you provide along with your fraud alert request or they might request a scanned copy of your driver’s license before extending credit.

An initial fraud alert lasts for one year and can be renewed or cancelled as you wish. In fact, you may be able to activate an “automatic fraud alert” with the credit bureaus, which will renew your fraud alert automatically every time it expires. On the other hand, removing a fraud alert can be done rather easily online.

What a fraud alert doesn’t do

To be clear, a fraud alert goes into effect on your credit report, not your individual credit accounts.

The most significant shortcoming of fraud alerts is that they do nothing to protect your existing credit accounts. In other words, if a thief attempts to use a credit card they swiped from your wallet, a fraud alert alone will do nothing to stop them from making purchases.

If you’re worried that your credit card numbers or other existing credit account information have been compromised, don’t rely on a fraud alert to protect you from criminals. In these cases, you need to call your creditor right away and let them know. Once you do, it’s generally a simple matter of canceling your existing credit card and mailing you a new one.

Fraud alert vs. credit freeze

A fraud alert can make it tougher for identity thieves to open credit accounts in your name, but there’s another action you can take -- a credit freeze -- that makes it impossible.

In a nutshell, a credit freeze allows you to deny access to your credit report to anyone. So, when credit is applied for in your name and a lender attempts to view your credit score or credit report, they’ll be unable to, and therefore will be unable to open an account.

Thanks to recent legislation, credit freezes are now free. Unlike fraud alerts, however, you need to set a credit freeze with each of the three credit bureaus individually, and the freeze won’t expire until you choose to end it.

To sum it up, a credit freeze is a more extreme (and effective) action to take if you have reason to believe that your identity has already been compromised, or if you don’t plan on applying for any new credit anytime soon and want to protect yourself as much as possible.

How to set up a fraud alert

Setting up a fraud alert is a rather easy process. It’s free to do, and if you set up a fraud alert with one of the three major credit bureaus (Equifax, Experian, or TransUnion), they are required to inform the other two for you.

With that in mind, here’s what you need to do if you want to set up a fraud alert on your credit report:

1. Choose one of the three credit bureaus -- Equifax, Experian, or TransUnion.

2. Complete that bureau’s fraud alert form, making sure that you include your current contact information. Here are links to each of the three:

3. Print, write down, or bookmark the web page that explains that bureau’s procedures for extending or removing the fraud alert.

To sum it up, a fraud alert can be an excellent proactive way to guard against identity theft and can be your first line of defense against the massive data breaches we keep seeing. A fraud alert doesn’t protect your existing credit accounts but can make it difficult for identity thieves to open new fraudulent accounts in your name.

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