Unfortunately, there are some people in this world who are skilled in the art of fraud. Their modus operandi is to obtain credit in your name, make costly purchases, then charge your account. And when your next credit card invoice arrives, you’ll be in for a very unpleasant surprise.

Fortunately, there are ways you can fight back and avoid credit fraud:

Fraud Alerts

If a fraudster tries to get credit in your name, he or she can be stymied if you’ve added a fraud alert to your credit report. The creditor, in checking your credit, will find a statement that says something like, “I may be a victim of fraud. Call me at [your phone number] before extending credit.”

There are two kinds of fraud alerts, both free:

90-Day Alert: Maybe you suspect, but aren’t sure, that you might have been the victim of an identity (ID) theft. Ask one of the three major credit bureaus to contact you whenever you apply, or someone claiming to be you applies, for a credit purchase within 90 days.

The credit bureaus are:

Equifax: Phone 1 (800) 685-1111. Web: www.equifax.com

Experian: Phone 1 (800) 888-397-3742. Web: www.experian.com

Trans-Union: Phone 1 (800) 888-4213. Web: www.transunion.com

7-Year Alert: You should also consider this other, less common alert – which remains active for seven years – when you must prove to the credit bureaus that you’ve definitely been a victim of ID theft. With this alert, you will be asked to provide documentation from your credit card companies or other financial institutions.

Credit Freeze

A credit freeze (also called a fraud freeze or security freeze) offers more protection than a fraud alert. Once it goes into effect, potential creditors or insurance companies can’t access your credit information until you give permission to unfreeze it. Should they contact you to request an unfreeze, you’ll know if someone is trying to steal your identity.

This service is available in all fifty states and Puerto Rico. If you’ve been an ID theft victim, you can list your account without charge in most states; if you haven’t, the credit bureau will assess a small charge to set up the freeze and then unfreeze it later. For more information, visit www.consumersunion.org.

Fraud alerts and credit freezes can’t guarantee total protection, because some creditors unwisely issue credit without checking a credit report. But most financial institutions routinely use credit checking to protect themselves. And by protecting themselves, they’re protecting you.

Related Posts:

1. WARNING – Beware of Check Cashing Fraud
2. Debit Cards: A Good Deal
3. Keeping Your Credit Cards at Arm’s Length