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It also depends on whether the application
process is automated. Mortgage lending often involves
a face-to-face application, which allows for a thorough
verification process, says Rod Griffin, public education
manager for Experian. With instant credit card approvals,
it's often an automated process with no person involved,
no way for anyone to call you, he says. In such cases,
"They do deny the application rather than call."
But even though the application gets rejected, he said
he does know that some companies will send the consumers
letters asking if they would like to continue their
application process in writing.
Automatic denials on in-store credit applications
are not a given. Discover Card's vice president of acquisition
Mark Scarborough, for instance, says that Discover's
policy in instant-credit situations is that a message
gets sent to the store clerk to call Discover and put
the applicant on the phone. Otherwise, the company will
call the consumer "multiple times" until 30
days expire. In the case of a freeze, Discover will
send consumers letters explaining how they can complete
their credit applications.
3. You can still get instant credit with a fraud alert.
In theory, you should still have the ability to open new credit accounts in the name of Joe Schmo if you are Joe Schmo. But if the issuer's policy is to deny credit applications when the consumer has a fraud alert, you won't get approved. Katz recommends removing the fraud alert in advance of applying for new credit.
Unlike the credit freeze, which lets consumers lift a freeze for one creditor, the fraud alert only offers a global lift.
4.
A fraud alert remains on your credit report until you
remove it.
Initial fraud alerts expire after 90 days. The
active duty alert lasts for one year. Only the extended
alert lasts for seven years, and even then does not
stay on indefinitely like the credit freeze does in
most states. (In Kentucky, Nebraska, Pennsylvania and
South Dakota credit freezes expire after seven years
from the date of placement, or when the consumer requests
their removal.)
5.
Fraud alerts remove you from prescreened credit and
insurance mailing lists for 90 days.
While initial fraud alerts expire after 90 days, placing
one removes you from pre-screened credit and insurance
mailing lists for two years. Extended alerts take consumers
off prescreened lists for five years.
6. You are stuck with the phone number you provide for verification calls.
Credit-reporting agencies allow you to change the telephone number you originally listed. If you change numbers, contact the credit bureaus for more instructions. You may be asked to send proof of the new number, such as a copy of a phone bill in your name.
7.
Once removed, creditors can still see that a file once
had a fraud alert.
Rest assured, once a fraud alert expires or gets removed,
it is gone like free money. No new creditors will know
and, thus, make credit-granting decisions based on,
an old fraud alert.
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