Why is placing a fraud alert an effective way of dealing with inaccuracies in a credit report?

A. You will be contacted when someone tries to open a new account in your name.

B. No one can share your credit report with a credit card or lending company.

C. You can only use your credit cards if you notify one of the credit reporting agencies.

D. No one can use your credit cards to make a purchase.

Answer

The correct answer is A. You will be contacted when someone tries to open a new account in your name.

Explanation

Placing a fraud alert on your credit report is a proactive measure that signals to potential creditors that they should take extra steps to verify your identity before granting new credit. When a fraud alert is in place, creditors are required to contact you directly to confirm your identity before they can open a new account in your name. This feature is particularly valuable in protecting against identity theft and helps address inaccuracies in your credit report by giving you an opportunity to assess any unauthorized activity or attempts to open accounts in your name.

The other options are not accurate regarding the purpose of placing a fraud alert:

Overall, the primary function of a fraud alert is to help you monitor and protect against identity theft by ensuring you're notified of actions taken in your name without your knowledge.