Setting a Fraud Alert:

A Simple Step to Protect Your Credit

Years ago, when identity theft started running rampant, many of us were advised to freeze our credit. It was free, not overly complicated, and ensured that no one would be able to open a line of credit in our names.

But, if you’re anything like me, after one or two attempts to open a new line of credit in my own name, where at least one of the credit bureaus made it nearly impossible to remove the freeze in a timely manner, the credit freeze started to feel more like a hindrance than protection. It was, to say the least, frustrating. After all, I froze my credit to keep others out, not myself.

I know many who have gone through similar experiences to my own and have given up their attempts to protect their credit through a freeze. And, not wanting to pay for the more costly but easier to use credit “lock” services, many are now relying solely on a free credit monitoring type service or aren’t really monitoring their credit at all.

And while a free credit monitoring service is definitely a good idea, it’s not actually a proactive way to prevent someone from using your personal information to open up a new line of credit in your name. It simply gives you a fairly timely alert when somebody does.

But is there anything you can do that won’t lock you out of using your credit for several business days when you need it, but could potentially stop someone else from accessing it? Fortunately, the answer is yes. By setting a fraud alert on your account with the credit bureaus, you basically communicate to them that it’s okay to open up a line of credit in your name, but they need to call you first to authenticate that it’s actually you opening the line of credit. It takes only a few minutes to do, and once you set a fraud alert with one of the credit bureaus, they have to communicate that with the others, so that they’ll all be forced to call you before you (or anyone else) are able to open a line of credit in your name. I personally find the Transunion site to be the easiest to navigate when it comes to setting and removing fraud alerts, but it can be accomplished using Equifax or Experian as well. No matter which site you choose to set the alert on, once you’ve set it, you’ll receive confirmation in the mail from the others letting them know that they’ve added a fraud alert to your account.

It’s a simple step to put a little bit more hassle in between your credit and someone trying to take advantage of it. While not impenetrable (if someone has your phone as well as your social security number, and other personal info, they’ll be able to get around this), the truth is most people looking to commit fraud are out there looking for something easy to accomplish, and the more layers of complexity they have to go through, the less likely they are to see their nefarious mission through.

The catch is that a fraud alert only lasts for 1 year, so you’ll want to set a calendar reminder each year to reset the fraud alert as part of an annual money maintenance routine. But once you’ve done it, it’s a relatively easy thing to go in and set again, and unlike a credit freeze, it won’t prevent you from opening a new line of credit (you just need to make sure to have your phone handy if you’re applying for financing, as you’ll typically receive a call almost immediately).

Like any level of credit protection, it’s also important to realize that this can’t protect you from everything. Credit/debit card number theft for already existing lines of credit and someone filing a tax return in your name hoping to collect on your refund aren’t protected by this measure. But this will put an added barrier in between you and someone trying to take out a $50,000 car loan in your name, or someone opening up a new credit card and running up a bunch of fraudulent charges. And since it takes only minutes to set up (but often weeks or years to resolve identity theft cases) there’s no reason not to put a fraud alert on each year as a minimum level of protection for your credit.

Got a few more minutes to spare? People who make a life and a living out of stealing your information are often deterred by anything that makes their job more difficult. After all, why spend hours or days on something if someone else is making their accounts accessible in seconds or minutes. So set aside some time to regularly change your passwords on your accounts (particularly money-related accounts and the email account you use for 2-factor authentication), and read up on what makes it harder for someone to brute-force break your password before choosing new ones. An hour a year spent putting a fraud alert on your credit and protecting your accounts with new and strong passwords is a small time investment that has the potential to protect you from all but the most targeted attacks on your identity, and potentially save you a lot of time, hassle, and money. So don’t put it off.