If you want to keep tabs on your credit report to catch errors, improve your score or keep an eye out for fraud, you might be tempted to sign up for a credit report monitoring service.
A credit report monitoring service tracks your credit report at one or more of the three major credit bureaus and immediately sends you an alert if any change or suspicious activity occurs.
Personal finance experts are divided about whether these services are worth the cost, but many say signing up can help some consumers. But it’s important to be able to distinguish exactly what these services offer, how much they cost and what you can expect in return for your payment.
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Here are some tips to help you navigate the pros and cons of credit monitoring services:
The Basics About Credit Report Monitoring
Basic credit monitoring services usually track your credit reports at one, two or all three of the major credit bureaus –Experian, Equifax, and Transunion — and send you an e-mail, text message or letter, depending on your preference, if there’s an inquiry or other activity. Many also offer unlimited access to your credit report from at least one of the bureaus, tracking of your credit score, telephone help with fraud resolution and even reimbursement of some out-of-pocket expenses incurred while trying to resolve identity theft or other fraud.
Credit monitoring services can be helpful for spotting certain problems, such as if somebody opens a new credit account in your name using your stolen information. But they don’t necessarily alert you to every type of identity theft you could encounter. For example, if somebody is using your stolen personal information to get a job or a cell phone, something that wouldn’t necessarily be reported to a credit reporting agency, then credit monitoring isn’t going to pick that up.
Credit Report Monitoring versus Identity Theft Protection
For that reason, more providers have begun offering broader identity monitoring services that typically include credit monitoring along with other features — such as monitoring of public records, databases and websites for use of your personal information.
Total identity monitoring will check bank accounts for unauthorized changes to personal information and informs consumers of changes to account contact information or attempts to add new account holders to existing accounts. Ii also issues alerts for new credit account applications being made against your credit file so you can act quickly to resolve fraudulent activity.
It should also give you unlimited, 24/7/365 online access to all three annual credit reports and scores so you can check to see if information is accurate and up to date to better manage your credit, and help you identify important changes and see how your credit is trending over time.
Is Credit Report Monitoring Worth the Money?
Consumer advocates don’t all agree on whether credit monitoring, which typically costs $10 to $15 or more per month — a total of$120 to $180 a year — is worth the money. Some say it’s an extra layer of protection that’s smart to have, while others say it’s unnecessary.
Here’s our take. If you want to simply monitor your credit score and activity being placed on your credit report, perhaps not. However, if you also want to protect your overall identity than it most definitely is. Identity theft is the fastest growing crime in America. Having your identity stolen without any protection or insurance coverage can cost you thousands of dollars to recover from.
If You Want Credit Report Monitoring Only
Instead of shelling out cash for just credit monitoring, consumers could simply get their free annual credit reports from the three major bureaus at AnnualCreditReport.com and closely watch activity on their bank and credit card accounts. A consumer who wants further protection could place a 90-day fraud alert on his credit files or even pay a one-time fee to enact a credit freeze which prevents creditors from accessing the credit reports until the consumer lifts the freeze.
If You Want Full Protection
There are several companies that go beyond just credit monitoring and offer full identity protection. We recommend LifeLock. If you want identity theft protection only they have LifeLock Identity Theft Protection that we can set you up with for just $9/month or $99 annually. Or, for full coverage including credit monitoring they have LifeLock Ultimate. LifeLock Ultimate provides identity theft protection and unlimited, 24/7/365 online access to all three major bureau credit reports and scores so you can check to see if information is accurate and up to date to better manage your credit. The cost for LifeLock Ultimate is just $25/month.