Credit-card fraud is an unfortunately real possibility, but you’re not the sitting duck that some would-be fraudsters might think you are. Credit reporting companies have a measure in place that can stop them in their tracks before you have to deal with the consequences.

A brick wall to credit fraud

The way it works is simple: if you suspect that there may be some shady dealings going on with your credit, you can contact one of the three major credit reporting agencies and issue a fraud alert. If an alert shows up on your credit report, lenders are instructed to contact you before they authorize any new credit accounts, auto financing deals, cellular phone contracts or other commitments that take your credit history into account.

Equifax, TransUnion and Experian each offer three types of fraud alert you can place on your credit report, each with their own set of parameters:

• Initial Fraud Alert — If you’re suspicious that identity fraud or credit theft might be taking place, this is the alert you’re looking for. It lasts for 90 days and can be put into force through an online form or a phone call.
• Extended Fraud Alert — This is the nuclear option of fraud alerts, lasting for seven years and requiring extra proof of identity to enact. This option can only be initiated through postal mail and should be reserved for people who are certain that they’ve been targeted for fraud but can’t afford a credit freeze.
• Active Duty Fraud Alert — Designed for military personnel who deploy overseas, protections offered by this option last for one year and can be enacted via telephone or on the Web.

When to issue a fraud alert

As scary as it may seem, all it really takes for thieves to get control of your credit is your full name, your birth date and your Social Security number. If someone gets their hands on your purse, wallet, smartphone or laptop, or if you use less-than-secure passwords for online accounts that contain sensitive information, those vital data — known as the “Holy Trinity of identity theft” — can fall into the wrong hands.

If any of these things have happened, a 90-day initial fraud alert might save you trouble later. Also, recent postal security measures have made it more difficult to file illegitimate change-of-address forms, but the possibility still exists. If the volume of your mail drops off suddenly, it might be wise to visit a post office or run a credit report to find out if anything funny is going on before calling in an alert.

Additional precautions

Of course, a fraud alert isn’t completely foolproof. Your credit is still active while under alert, and lenders can miss the alert if they’re not being vigilant. If you really feel you’re in danger of credit fraud and you can afford a little extra hassle, a credit freeze is a much stricter precautionary measure.

It also can’t hurt to investigate some other ways to fight identity theft. Fraud is a problematic circumstance, to be sure, and the measures you take might be the difference between it being devastating and merely inconvenient.