What is a fraud alert intended to do when placed on a credit file?

• A. It triggers identity verification steps before new credit can be issued.
• B. It automatically freezes the consumer's credit.
• C. It has no effect on credit applications.
• D. It is only used for marketing purposes.

Answer: (A)

A fraud alert is a safeguard placed on your credit file that tells lenders to take extra steps to verify your identity before issuing new credit. This helps deter someone who has your personal information from opening new accounts in your name. It does not automatically freeze your credit, and it isn’t used for marketing. Because lenders must verify identity when they see the alert, it does affect credit applications by requiring additional verification steps, such as contacting you or requesting more information.