Recently I added a fraud alert to my credit report to see what exactly it does.
I went to http://www.experian.com/fraud and added an Initial Security Alert (90 days) to my credit report. Surprisingly, this was very easy to do, and only took me about 10 minutes. In any case, I got a free peek at who's been viewing my credit, what accounts I have open, etc. I was able to verify that there are no other accounts in my name (thankfully, there were none), and I even submitted a dispute that a card that I am no longer an authorized purchaser on is still listed in my credit. Within 2 weeks that card was removed from my credit report. It is important to note that you will not be shown your FICO score when submitting a fraud alert. You can pay a small amount to have it displayed though.
After submitting the fraud alert, I also received a confirmation in the mail from Experian, TransUnion, and Equifax that they have put fraud alerts on my file which will last 90 days. It seems Experian notified the other big credit bureaus on my behalf. This was a nice bonus.
Now, a fraud alert is supposed to do the following, as referenced from http://www.fightidentitytheft.com/flag.html:
A fraud alert is something that the major credit bureaus attach to your credit report. When you, or someone else, tries to open up a credit account by getting a new credit card, car loan, cell phone, etc., the lender should contact you by phone to verify that you really want to open a new account. If you aren't reachable by phone, the credit account shouldn't be opened. A creditor isn't required by law to contact you, however, even if you have fraud alert in place.
I put the fraud alert on my file on June 16, 2007. On June 30, 2007 I went to purchase a new car and I applied for financing through Toyota. Surprisingly I was approved, and I have not yet received any calls from the creditor or the credit bureaus that a new account is attempting to be opened in my name.
The net result is that I'm not yet convinced that these fraud alerts actually do anything aside from letting me see what accounts are open in my name. Supposedly they also help cut down on some of the junk mail and credit card offers you receive. We'll see if that occurs over the next couple of weeks….
I’ll post an update if I happen to get a call from the credit bureaus….
Update July 7, 2007 -
I appears these fraud alerts do work. I actually finalized the purchase of a new Toyota Highlander on July 4th. I did all the financing, and took delivery of the car. First thing on the following morning (July 5th) I received a call at work from Toyota financing, telling me they see a fraud alert on my credit report, and they were inquiring as to if I really did apply for the car loan. I confirmed I did by giving them the last four digits of my SSN and my home address.
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