Sometimes people get into situations where they feel that their financial data has been compromised so much so that it may be possible for someone to commit identity fraud. A typical situation is where the wallet or a purse gets stolen along with credit cards, driver’s license and perhaps possibly the SSN. The prudent thing to do in this case will be to place a security alert on your credit report after filing a report with the police and cancelling your credit and debit cards that have been stolen.
Why people hesitate is if they are soon to make an application for a major line of credit such as mortgage loan or an automobile loan. They feel doubtful as to whether placing a fraud alert on their credit report will prevent them from getting the loans that they are applying for. The fact is that while placing a fraud alert on your credit report will probably slowed down the approval process for the loan it will not stop it altogether. The process of loan application gets slowed down due to the fraud alert because of the fact that a fraud alert requires every vendor to verify that identity of the applicant manually by taking preventive measures against identity theft such as making a call to the applicant and requesting additional documents as proof of identity.
The initial security alert that you put on your credit report lasts for 90 days and is shared with the National credit reporting agencies. The window of 90 days gives you time to verify whether your identity has indeed been used to commit credit fraud. If you do not find any evidence of any malicious activity against your credit then you can simply let the 90 day credit alert expire. If you do find evidence that credit fraud has been committed against you than you can add an extended statement called the fraud written statement which says that you are a victim of identity theft. Filing a victim’s statement require you to first find a police report which in case of theft of wallet or of those you must already have done. A fraud victim of statement requires the lenders to contact you before granting credit in your name. Fraud victim’s statement remains on the credit report for a period of seven years and is shared with all the National credit reporting agencies.
The idea behind fraud alert is to help individuals who believe their financial information has been compromised combat the risk of fraud and assist those who have been victims of credit fraud to recover from the cry. Federal law requires that all winters and businesses respond in a decreed fashion to the security alerts found on a credit report making them effective in combating identity theft and credit fraud.