Credit Fraud
Getting your identity stolen can be one of the worst nightmares any person can go thorough. Not only can it cost you your life savings, but it can be a specter that can haunt you for years to come. For those that have had credit fraud alerts issued for their accounts, it can be a scary process. Here is a quick primer on what you can expect when it comes to credit fraud alerts and what you won’t be seeing.
The first thing you need to know is that you, yourself can issue an alert for your credit if you feel that there is a chance your security has been compromised. Simply call the credit bureaus that handle your accounts and let them know. It will be a 90-day notice and you will be well protected over that time. Most people believe that a credit card company or even the police are required to start a fraud alert on your accounts, but you have the ability to do it yourself if you feel it is necessary.
For many people, the appeal of issuing a credit fraud alert is that they believe that creditors are then required by law to contact you whenever anyone tries to use your credit. This is obviously a huge boost since if your credit has been stolen, you can catch the perpetrator red handed. But this isn’t actually true. When a credit fraud alert is issued for an account, creditors are asked to contact you when a new credit inquiry is made, they are not required by anyone to do so. Most creditors respect your wishes and do contact you, but do not ask for a credit fraud alert to be issued and assume that every creditor will contact you because it just won’t happen.
Many people also get the idea of a credit freeze and a credit fraud alert mixed up. With a credit freeze, you will not be able to open any new accounts, no matter what. These are usually only issued when there is a confirmation that your identity has been stolen. With a credit fraud alert, it is an iffy proposition when it comes to opening new credit accounts. Some creditors will allow it, but if they have a special policy forbidding new accounts being opened to folks that have a standing warning issued, you will be denied. Be prepared for that outcome if you try to open a new credit account before you get your credit fraud alert cleared up.
Folks also tend to get confused as to how long a credit fraud alert lasts. Most people believe that the alert lasts as long as they want it to, and they can simply call and have it removed. If the alert is self-imposed, it will expire after 90 days, no matter what. If the alert is an active duty one, it will last for a year. The only alert that lasts a significant amount of time if it is an extended alert. These alerts last up to 7 years, but again, they don’t provide the same guaranteed protection that most people believe they do.
Getting your identity stolen or even the prospect can send your financial life into a tailspin. But with the proper preparation and the right prevention, you can avoid identity theft for good.