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Should You Use Credit Monitoring Services?

Credit monitoring services alert individuals to changes to their credit report instantly- either via email, text message on cell phones or by phone calls. Many people use credit monitoring services to help them keep an eye on their credit histories and to increase their ability to recognize a fraudulent activity. The US Federal Trade Commission estimates that it takes about a year before a consumer notices that they have been victims of identity theft. If you are using a credit monitoring service, you would have noticed the activity much faster than if you were only obtaining your credit reports annually. With over 10 million Americans falling victim to identity theft crimes annually, it’s no wonder we are willing to pay for services like credit monitoring. Most credit monitoring services charge a monthly fee between $10 and $15, with the price dependent upon the level of monitoring you receive.

Information Provided by Credit Monitoring Services Each credit monitoring service offers information for a fee; although the exact information provided and the price you pay for it may differ slightly between companies. Most credit monitoring services give you access to your credit score, although some may only provide the FICO score and others might provide access to all 3 of the different types of credit scores that exist. FICO is the score most commonly used by lenders to determine an individual’s credit worthiness. Credit monitoring services provide identity theft reimbursement coverage, with limits between $15,000 and $25,000, depending on the service you use. This means if you become a victim of identity theft while subscribing to the credit monitoring service, you will not be required to pay for expenses that are a result of the theft up to the amount of coverage you have.

Some credit monitoring service providers offer a range of tools that help you analyze your current credit situation, and how you can improve it. Online based forms let you predict what effects applying for a loan might have on your credit score, or the effect of paying off a credit card. These tools are valuable when you’re trying to improve your credit score as it gives you a good idea of the activities that will result in the largest increase in your credit score. Some credit monitoring services are provided directly through one of the three major credit reporting agencies- in which case you will only have access to that particular credit report. Other agencies provide access to all three reports, and give you unlimited access- while some only update your credit reports every thirty days. You’ll be alerted if the following activities occur to your credit report, as these activities could indicate fraudulent activity if you haven’t done something to cause these alerts to occur yourself: A new account is opened A company makes an inquiry to your credit report Your address is changed If Public Records are added Any existing account changes information The Value of Credit Monitoring all 3 Reports You may find that you can pay a dollar or two less each month for a credit monitoring service that only provides monitoring of a report through one of the credit reporting agencies. If you think this is enough, you may be wrong! Consider the following scenario: You have credit monitoring on your Experian report. A thief applies for a new luxury car at a local car dealership, and the car dealership pulls your report from Equifax. You would not receive an alert of the Equifax report inquiry with a monitoring service that only monitors Experian reports. You would not see the fraud until the car is approved and shows up a month later on your credit report as a new account, and the thief is driving around with the car! Having credit monitoring on all three of your credit reports would alert you to the inquiry of your report before the account is approved- and you could take action before it goes any further.

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