What Are Fraud Alerts? How They Protect Your Credit and What to Do Next

Fraud alerts are a simple yet powerful tool to help protect you from identity theft and credit fraud. When placed on your credit file, a fraud alert notifies lenders and creditors to take extra steps before approving new credit in your name. This article explains what fraud alerts are, how they work across the major credit bureaus, when to use them, and how they differ from other protections such as credit freezes.

Understanding the Basics: What a Fraud Alert Does

A fraud alert tells businesses that access your credit report that you may be a victim of identity theft or that your personal information may be at risk. With an alert in place, a lender typically must take reasonable steps to verify your identity before extending credit. That could mean asking for additional identification, contacting you directly, or taking other verification measures.

Fraud alerts are recorded with one of the national credit reporting agencies. Once placed, the bureau notifies the other major bureaus to ensure the alert appears on all three credit reports. This decentralized model helps make the protection more widely effective without requiring you to contact each bureau individually.

Types of Fraud Alerts and How Long They Last

There are three common types of fraud alerts: initial, extended, and active-duty military. An initial fraud alert is a short-term protection that lasts for a limited period and is best when you suspect potential fraud but do not yet have proof of identity theft. An extended fraud alert provides longer protection and requires a police report or a similar identity theft report. Active-duty military alerts are available for service members concerned about identity risks while deployed.

Traditional timing for an initial fraud alert is one year, while an extended alert generally lasts seven years. Active-duty alerts typically last one year but can often be renewed as long as the service member remains deployed. These durations can vary by jurisdiction and by the policies of individual credit bureaus, so it is important to check current rules when you place an alert.

How to Place a Fraud Alert

To place a fraud alert, contact one of the three major credit bureaus: Equifax, Experian, or TransUnion. When you request an alert from one bureau, that bureau is required to notify the other two so your alert appears on all three reports. You can place an alert online, by phone, or by mail. Online placement is the fastest and most convenient option, but phone and mail remain available for those who prefer them.

When you place an extended fraud alert, you will usually need to provide an identity theft report, such as a police report or a report filed with a government agency. Have copies of your identification and any documentation ready to speed up the process. After the alert is active, lenders who pull your credit report should see the alert and follow additional verification procedures.

What Happens When a Lender Sees a Fraud Alert?

When a lender or creditor sees a fraud alert on your credit report, the business must take additional steps to confirm your identity before opening a new account or extending credit. Those steps can include requesting a copy of your government ID, calling you at a phone number on record, or asking security questions based on your financial history. The intent is to reduce the chance that a criminal can open credit accounts using stolen personal information.

Fraud alerts do not prevent existing accounts from being used. They apply primarily to new credit applications. That means you should still monitor your existing accounts for unauthorized charges and report suspicious activity promptly to your card issuers and banks.

Fraud Alerts vs. Credit Freezes: Key Differences

Fraud alerts and credit freezes are both tools to combat identity theft, but they work differently and have distinct advantages.

A fraud alert asks creditors to verify identity before issuing new credit, but it does not block access to your credit report. A credit freeze, by contrast, restricts all access to your credit file for new credit applications, effectively preventing most creditors from viewing your report unless you temporarily lift the freeze. Freezes are often stronger at stopping new accounts but can be more cumbersome when you need to apply for credit quickly.

Another difference is cost and ease of use. In many places credit freezes are free and remain in place until you remove them. Fraud alerts are also free in many jurisdictions but expire after a set period and may require additional documentation for extended alerts.

Impact on Credit Scores and Reporting

Placing a fraud alert does not affect your credit score. The alert simply changes how creditors are instructed to handle verification when they request your credit report. Your payment history, credit utilization, account age, and other traditional scoring factors continue to determine your credit score. That means you can safely use fraud alerts without worrying about a negative score impact.

When to Use a Fraud Alert

Consider placing a fraud alert whenever you suspect your personal information has been compromised. Common situations include receiving notices of data breaches, finding unfamiliar accounts on your credit report, discovering suspicious bank or card activity, or having sensitive documents lost or stolen. An initial alert is a useful first step while you investigate and decide whether an extended alert or credit freeze is necessary.

If you have documentation proving identity theft, such as a police report, an extended fraud alert provides longer protection and signals to creditors that the risk is substantiated. For active-duty military members facing increased identity risks while deployed, the special military alert offers tailored protections.

Steps to Take After Placing a Fraud Alert

After you place a fraud alert, take these accompanying steps to protect your finances and identity. First, obtain and review your credit reports from each major bureau to check for unfamiliar accounts or inquiries. Second, contact creditors where you find unauthorized accounts to dispute charges and close compromised accounts. Third, file an identity theft report with local law enforcement and the relevant government agencies if required for an extended alert. Fourth, consider additional protections such as a credit freeze, account password changes, and enhanced monitoring services.

Tip: Keep detailed records of all communications, dates, and document copies when dealing with identity theft and fraud alerts. Accurate records speed resolution and support disputes.

Common Questions About Fraud Alerts

Will a fraud alert stop all fraudulent activity?

No. A fraud alert reduces the risk of new credit being opened in your name, but it does not block access to existing accounts or prevent all types of fraud. Continue active monitoring and report suspicious activity quickly.

Do I need to contact all three credit bureaus?

No. Contacting one major credit bureau to request a fraud alert should trigger notifications to the other two. However, confirm with the bureau you contact that it will inform the others and verify that the alert appears on each report.

How long before a fraud alert takes effect?

Fraud alerts typically take effect quickly after the bureau processes your request, often within one business day. For extended alerts, you may need to submit supporting documents before the full protections are applied.

Conclusion: Use Fraud Alerts as Part of a Broader Identity Protection Plan

Fraud alerts are an effective, low-friction tool to make it harder for identity thieves to open new credit accounts in your name. They work best when combined with vigilant account monitoring, regular credit report reviews, strong account security practices, and, when appropriate, credit freezes or identity theft reports. If you suspect your information has been exposed, placing an initial fraud alert is a smart early step while you gather documentation and decide on longer-term protections.

If you need immediate protection, contact one of the major credit bureaus online or by phone to place an alert today and follow up by reviewing your credit reports and changing passwords on important accounts.