Steps That Service Members (And Others) Can Take To Protect Their Credit
According to the Consumer Financial Protection Bureau, service members have submitted 650 complaints about credit reporting since 2012. One in six of those complaints involved identity theft or misuse of accounts. Less than one percent of those 650 people had put an Active Duty Alert in place before leaving for a deployment.
An Active Duty Alert lasts for twelve months and is available to any service members that are on active duty and assigned away from their usual duty station. Once the credit reporting agencies receive the Active Duty Alert, a service member’s credit is protected in two ways. First, lenders are given notice of the active duty status and are required to take reasonable steps to verify identity before issuing new credit. Second, the service member’s name is removed from credit reporting companies’ pre-screening lists for credit offers and insurance. These protections help prevent identity theft while also stopping pre-approved credit offers from being sent to the service member’s home address.
Another available tool is the Initial Fraud Alert. In order to qualify, one must only have a good faith suspicion that they may be the victim of fraud or identity theft. This type of alert lasts for 90 days. Lenders are required to take reasonable steps to verify identity before issuing new credit. The alert also includes access to one free credit report from each bureau—this is in addition to the regular free annual credit report.
Extended Fraud Alerts are available to individuals that have been the victims of identity theft. The individual must have submitted an identity theft report with one of the credit reporting agencies. Once the alert is in place, lenders must contact you before issuing new credit. It also entitles you to two additional free credit reports a year. The extra credit reports make it easier to track credit and identify further issues. The alert lasts for seven years and also removes the individual from the pre-approval list for five years.
A final tool that service members and other consumers can use to protect their credit is a credit freeze. Some states provide free credit freezes. Others permit a small fee. In the case that a fee is permitted, it is payable directly to the credit reporting agency. While the freeze is in place, businesses, lenders, and employers cannot access your credit report without the freeze being lifted. State law determines how long the freeze lasts. The credit freeze also entitles individuals to one additional free credit report each year.
It is important for everyone to protect his or her credit score. For service members, who may be deployed away from home for extended periods, utilizing the tools above can drastically reduce the chances of identity theft or credit misuse.
A Chicago consumer lawyer from Atlas Consumer Law can answer any further questions you may have. Call us today for your consultation: (312) 313-1613.