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The impact of fraud alerts on your credit score

December 11, 2013 by · Leave a Comment 

Article submitted by Racmaghreb.

The Internet is riddled with credit card fraud and fraud alerts. Alerts warn card holders as well as lenders that they are at higher risk and to be vigilant and closely monitor financial accounts including bank and credit card accounts. Traditionally, these alerts expire within 90 days says Experian, one of the credit reporting agencies.

Traditionally, fraud alerts do not impact your FICO scores. Many believe that fraud alerts do not go in to the FICO credit scoring system. However an actual fraud on your credit card could impact your credit. A fraudulent charge on your credit card could put you in a bind temporarily resulting late payment charges and lowering your FICO score. A theft could also result in redirecting your bills making you temporarily unable to receive your statements on time. Theft could also empty your bank account putting you in a financial jam for a period of time. Also, fraud alerts could cause denial of credit applications during the time a fraud alert is in effect.

During the period of fraud alert including initial 90 day effective period as well as subsequent fraud alert renewal periods, creditors could ask for additional information before approving a request for credit.