Fraud Alerts May Prevent Thieves From Running Up Your Debt

In past generations an individual would need to physically visit a lending establishment in order to secure a loan. Those days are long gone. Today modern technology has made it possible to receive money (loans, credit cards, etc.) without ever dealing with anyone face to face. Business can now be conducted over the phone, the computer, the fax, or through the mail. And while these changes have added a great degree of convenience they have also added an element of danger. It is now much more likely that an individual will become a victim of financial fraud. Thieves now have the ability to easily assume another. s identity and receive credit in their name. This fraud can result in ruined credit and mountains of debt.

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So what can be done about this problem? There are several steps that can be taken to lessen the risk of becoming a target for identity theft. One preventative measure, in particular, which often gets overlooked is placing a fraud alert (also known as a security alert) on your credit reports. This alert is a statement which is placed on your reports to tell creditors to be wary of fraudulent activity. When an alert has been included on your reports a creditor is supposed to contact you for verification before approving any additional credit.

Fraud alerts were originally designed as a course of action to follow after something bad had happened. If your credit cards were lost or stolen, or you realized that someone had run up debts in your name then a security alert was a recourse you could take. Unfortunately, in many cases damage had already been done. With this in mind, fraud alerts are generally much more effective when used on a proactive basis. It is important to note that the alerts will stay in effect from 90 day to 1 year, depending on the credit bureau. This means that in order to keep the protection in affect you will need to renew.

There is no way to completely protect yourself from the possibility of financial fraud. Even security alerts are not full proof safety measures. The fact is that legally creditors do not have to contact you before issuing credit. However, many creditors will oblige your request which makes it all worth while. The bottom line is that the chance of an identity thief running up debts in your name are reduced when a fraud alert is used as a proactive measure.

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About the author:

Mark Carney is a professional consultant with First American Debt Consolidation and Loans, a debt consolidation service specializing in financial education, credit counseling, and debt management services nationwide.