How to Put a Fraud Alert on Your Credit Report and Get Free Identity Theft Protection

With growing awareness of identity and data theft, people are becoming increasingly concerned with identity theft protection. Many services offer to help you monitor and protect your identity - for a fee. The truth of the matter is that you don't need to pay for identity protection; you can do it yourself for free and be confident that you've taken the necessary steps to protect your identity. One of the key ways to protect your identity is to put a fraud alert on your credit report.

What is a fraud alert?
If you believe that your personal data may be compromised, you can place a fraud alert on your credit report. This can be done with any of the major credit reporting bureaus, which will then notify the other two bureaus of your fraud alert. When a fraud alert is placed on your credit report, lenders must verify your identity using a phone number you provide before issuing new credit. If you put a fraud alert on your credit report and an identity thief attempts to open a new credit card or buy a car, the lender will call your phone number prior to issuing credit and you'll be alerted to the attempted identity theft. If you need to apply for credit, the lender will simply call your number and you can verify your identity and easily get new credit. There is no charge to add a fraud alert to your credit report.

Initial Fraud Alert.
When you place an initial fraud alert, it will stay on your credit report for up to 90 days. You can call the credit bureaus at any time during the 90 days to remove the fraud alert from your credit report. There is no charge to place an initial fraud alert, and the only paperwork you will need is paperwork to prove  your identity when you contact the credit bureaus. After you place an initial fraud alert, you're eligible to receive a free copy of your credit report. Take advantage of this opportunity to order your report and determine whether identity theft has occurred. If you find anything suspicious or unfamiliar on your credit report, dispute the chares or account. For more information on disputing charges, check out the Credit Secrets Bible.

Extended Fraud Alert.
If identity theft does occur, you can place an extended fraud alert on your credit report that will stay for up to 7 years. Like the initial fraud alert, lenders must receive verification before issuing credit if you place an extended fraud alert on your report. You can also remove the extended fraud alert from your report at any time. The difference between the initial fraud alert and the extended fraud alert is that you must have a police report or an identity theft affidavit in order to file an extended fraud alert. You cannot file an extended fraud alert unless identity theft has occurred - so you can't file it just to protect your credit. Many consumers argue that a 90 day fraud alert is ineffective to deter identity thieves, so groups and organizations are working to change requirements for an extended fraud alert. Some states now offer a credit freeze to help combat identity theft in the long run.

The differences between fraud alert and credit freeze.
Fraud alert requires lenders to call you to verify your identity before they issue credit. Some consumers worry that lenders don't follow this requirement closely enough, so lobbyists have pushed to enable credit freezing as an alternative to fraud alert. You can currently freeze your credit in California, Vermont, Texas, Louisiana, Colorado, Washington and Maine. Because of recent high-profile data theft cases, 22 other states are considering bills to permit credit freezing. When you freeze your credit, lenders and employers are completely unable to access your credit report. In order to get new credit, you must lift the credit freeze, which can take up to three business days. One bonus is that credit freeze protects you from pre-screened offers, as companies cannot make credit inquiries. However, many lenders argue that a credit freeze creates too much hassle, and prefer to stick with the fraud alert that simply requires a lender to verify identity in order to issue credit.

Identity protection doesn't stop after you put a fraud alert on your credit report.
Adding a fraud alert to your credit report is just the first step to protecting yourself from identity theft. You need to monitor your credit report and take steps to dispute any unauthorized charges or accounts that arise as a result of identity theft. For information on how to effectively dispute a credit report, or more details on how to add a fraud alert to your credit report, check out the Credit Secrets Bible. For more tips on protecting and improving  your credit, sign up for our free credit secrets newsletter.