What is the main purpose of a fraud alert on a credit report?

The main purpose of a fraud alert on a credit report is to notify creditors of potential identity theft. When a fraud alert is placed, it serves as a warning to lenders that the consumer may be at risk of fraud, prompting them to take additional steps to verify the identity of the applicant before extending credit. This helps protect consumers from unauthorized accounts being opened in their name.

By placing a fraud alert, the consumer signals to creditors that they should exercise increased caution, including confirming the identity of anyone applying for new credit. This process can help prevent identity thieves from successfully using stolen personal information to incur debt in the victim’s name. Fraud alerts are a critical tool in identity theft protection strategies, allowing consumers to safeguard their financial health against potential abuses of their identity.