Will Fraud Alert Affect My Ability to Get Credit?

If you have reason to believe that you may be the victim of identity theft and you live in the U.S., you can place a fraud alert on your credit report via any of the three nationwide credit reporting agencies. Creditors who attempt to access your report will be informed that they must contact you to confirm your identity before extending credit.

Types

Two types of fraud alerts exist, as of January 2011. When you suspect fraud and call a credit reporting agency, an initial 90-day fraud alert appears on your credit report. At the end of those 90 days, you may contact the credit reporting agency again and ask them to extend it. Once you have gathered evidence and filed an identity theft report with local, state or federal authorities, you can request that an extended fraud alert be placed on your record. This type of alert lasts for seven years, and you must file a copy of your identity theft report with the credit reporting agency when you request it.

Effects

For the duration of whichever type of fraud alert you file, all creditors and potential creditors are directed by your credit report to confirm your identity before extending any new credit. While it does lengthen the process of obtaining new credit, it does not prevent you from getting new credit. Instead, it prevents thieves who have somehow gained access to your personal data from obtaining credit with your details, and ruining your credit history.

Considerations

More and more employers are checking credit histories of people they interview for open jobs. A good credit history is seen as a sign of reliability and trustworthiness, especially in positions involving fiscal responsibility. Be advised that those potential employers will see the fraud alert, too, and will be advised to contact you to confirm your personal details.

Misconceptions

Neither type of fraud alert is the same as a security freeze, which is another option in some states, including Washington and New Jersey. A security freeze does just that: it freezes your credit history so that no one can obtain credit with your details simply by applying for it. To obtain credit while your history is locked in a security freeze, you must contact credit reporting agencies and lift the freeze temporarily. This also holds true for employers or insurers attempting to access your history while it is frozen. Also, unlike a fraud alert, security freezes require you to contact each of the credit reporting agencies individually.