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Topics addressed on August 20, 2008:
Fraud alert may slow loan approval but shouldn’t prevent it
I recently lost my wallet, which contained my ATM card and my driver’s license. Although the card was cancelled within an hour of being lost, the person made one successful purchase with it. My concern is that they now have my driver’s license, which did not have my Social Security number on it. I understand that I can flag my SSN with the credit bureaus to report any fraudulent activity. Although I have a credit rating in the 800's, will this flag prevent me from obtaining a car loan that I will be seeking in the near future? Is this flag something you would recommend even though my Social Security number wasn't on my license?
What you are referring to is called an Initial Security Alert, or fraud alert. I do recommend you add the alert in your situation. It should not prevent you from getting a car loan, but it might slow the process a bit.
A fraud alert is a statement on your credit report that says you may be a victim of identity theft and asks lenders to verify your identity before granting credit in your name. You can request a free copy of your credit report when you add the alert.
The Initial Security Alert remains for 90 days and is shared with the other national credit reporting companies. That gives you time to check your credit report and make sure there is no sign of credit fraud. If there is not, you can simply let the alert expire.
If you do find evidence of fraud, you can add a Fraud Victim Statement, which says you are a victim of identity theft and asks lenders to contact you before granting credit in your name. To add a victim statement you must first file a police report, which I’m assuming you did when you discovered your card was used.
A fraud victim statement remains seven years and is also shared with the other national credit reporting companies.
The intent of fraud alerts is to help individuals who are at increased risk of fraud, or those who have verified that they are victims, recover from the crime. Federal law now requires that business respond in a reasonable manner to the alerts, making them very effective for that purpose.
Thanks for asking.
- The "Ask Experian" team