What Is a Credit Alert

A credit alert is a notice attached to a consumer report that instructs lenders and other users of the report to take extra steps to confirm a person's identity before opening new accounts or extending credit. The Fair Credit Reporting Act, the federal law that governs consumer reporting, describes these notices as fraud alerts. Separately, the phrase credit alert often refers to a notification generated by a credit monitoring service when something changes on a consumer report, such as a new inquiry, a new account, or a change of address. The two uses are related but not identical: a fraud alert changes how a report may be used, while a monitoring alert simply informs the consumer that a change occurred.

Federal law recognizes three kinds of fraud alerts. An initial fraud alert lasts one year and can be requested by any consumer who suspects identity theft or fraud. An extended fraud alert lasts seven years and requires the consumer to submit an identity theft report, such as a report filed with the Federal Trade Commission at IdentityTheft.gov or with a local police department. An active duty alert is available to service members on active duty deployment and lasts one year. When a consumer requests an initial, extended, or active duty alert from one of the national credit reporting companies, that company must notify the other two so the alert is placed on all three files. Placing a fraud alert is free.

A fraud alert does not block access to a consumer report. Instead, it requires a business that uses the report to verify the consumer's identity using reasonable procedures before proceeding. For example, a lender may call the consumer at a phone number the consumer provided, or ask for additional documentation. A freeze, by contrast, restricts access to the report entirely until the consumer lifts it. A credit lock is a similar tool offered by some commercial services. Consumers who want to place a fraud alert generally contact one of the national credit reporting companies directly, and that company must then pass the request to the others.

Credit monitoring alerts operate differently. A monitoring service watches a consumer report and sends a message when it detects a change, such as a new account, a hard inquiry, a new address, or a public record. These alerts are informational; they do not instruct lenders to verify identity, and they do not limit who can see the report. Consumers can obtain free weekly reports from AnnualCreditReport.com and review them for accounts or inquiries they do not recognize. The Federal Trade Commission and IdentityTheft.gov provide step-by-step guidance for responding when a monitoring alert signals possible identity theft.