Table of Contents
- 1 What is a Credit Monitoring Service?
- 2 Do I Need a Credit Monitoring Service?
- 3 What Are the Types of Credit Monitoring Services?
- 4 Which Credit Monitoring Service Should I Choose?
- 5 How Do Credit Monitoring Services Protect Me?
- 6 What Do I Do If My Credit Monitoring Service Finds a Problem?
With large-scale data breaches becoming more and more common – the Experian/T-Mobile hack that exposed the records of 15 million T-Mobile customers in 2015 comes to mind – having a reliable credit monitoring service is essential for everyone who wants to be sure their financial information hasn’t been compromised.
However, not all credit monitoring services are created equally. And finding the right service that provides the protection, information, and resources you need can prove challenging.
If you’ve never thought about credit monitoring before, or if you don’t know where to begin, this article will help you to understand the benefits of credit monitoring services, how to protect yourself, and what you should look for when choosing the best credit monitoring service for your situation.
What is a Credit Monitoring Service?
At its most basic, a credit monitoring service is a way to keep track of any changes in your credit files from the three major credit bureaus – Experian, Equifax, and TransUnion. A credit monitoring service may keep track of activity on your credit files, changes to your credit scores, or both. The types of activity that may be tracked via a credit monitoring service include:
- New accounts
- Changes to your credit limits
- Large purchases on an account
- New activity on a dormant account
- Credit inquiries
- Missed payments
- Collection accounts
- Other negative information
Some credit monitoring services will also provide you with a copy of your credit report and assistance with managing identity theft so that you can correct any fraudulent activity as soon as possible to minimize losses. These services may or may not include identity theft insurance to cover you in the event that you are held liable for fraudulent charges.
Do I Need a Credit Monitoring Service?
Given the staggering number of businesses that have been hacked in recent years, both credit card fraud and identity theft are a concern that the average person can’t afford to ignore. Your personal information may be stolen from legitimate business transactions and it can happen at any time, regardless of the precautions you take personally to keep your information safe.
Even if you don’t currently have a credit card, scammers can take your information and open new accounts in your name – exposing you to hundreds or even thousands of dollars in losses. All it takes is one instance of identity theft to ruin your credit for months or even years.
Without a reliable credit monitoring service in place, you may not realize that your credit has been compromised until you are denied credit or the bill collection notices start coming in – and by then, it’s too late.
What Are the Types of Credit Monitoring Services?
Not all credit monitoring services provide the same features. Most credit monitoring services can be broken into three types of monitoring and/or protection.
- Credit Report Monitoring – active monitoring of your credit reports for changes that might be linked to identity theft or credit card fraud.
- Identity Theft Protection – active monitoring of your personal information such as your social security number, registered credit cards or bank account numbers to be sure they aren’t compromised online.
- Comprehensive Credit Monitoring – a combination of credit report monitoring and identity theft protection designed to keep both your credit file and your personal information safe and secure.
Which Credit Monitoring Service Should I Choose?
When evaluating credit monitoring services, it’s important to compare your needs to what each service offers. To give you an idea of what kind of credit monitoring service might be right for you, consider this checklist of recommended actions you’ll need to take if your identity is stolen:
- Call the companies where the fraud occurred
- Place a fraud alert on your credit report
- Get a copy of your credit report to look for other problems
- Report the identity theft to the FTC and the police
- Close any credit card accounts opened in your name
- Cancel any other types of account fraudulently opened in your name
- Dispute charges through your credit card company
- Dispute any negative information on your credit file caused by the fraud
If you feel comfortable handling these tasks (and more) on your own, you can probably get by on a credit monitoring service that alerts you to any changes in your credit files without any extra support.
However, if you want to monitor for things like your personal information appearing online on well-known financial black markets, and assistance with getting your financial future back in order, a more comprehensive credit monitoring service just makes sense.
When it comes to comprehensive credit monitoring, there are several options on the market:
One of the attractive things about signing up for credit monitoring with MyFICO is that they actually perform the credit scoring algorithms that you’d get from any other service.
It’s basically like getting your information straight from the horse’s mouth. That being said, MyFICO offers two different levels of credit monitoring services.
The first is called FICO Essentials 1B. You’ll get monthly access to one credit report and one credit score, both of which are based on your information from Equifax. You get instant access to your account, can monitor changes, and even track your credit history.
As an added bonus, you’ll receive help in restoring your identity should any of your personal information be stolen. This package costs $19.95 per month, or you can save by prepaying a year for $219.
Alternatively, you can elect for the FICO Ultimate 3B plan, which provides your credit report and score from all three bureaus. However, you only get updates every quarter, so you won’t see changes as they occur. On the other hand, you do get intelligent identity theft monitoring, which is a great feature to use.This plan is available for $29.95 per month or $329 for the year.
If you’re looking for simpler options, Identity Force may be a better fit. They provide a two-tiered credit monitoring service and their UltraSecure+ Credit option covers the same services as Identity Guard.
It includes public information monitoring, alerts for changes to your credit reports, credit score monitoring and more. If you don’t require monthly credit report monitoring and scores, their UltraSecure option may suit you better.
Both of these plans also comes with identity theft assistance, so if your personal information is compromised, you have professional help to file all the necessary reports and paperwork to prevent losses and get your life back on track.
LifeLock is a well-known credit monitoring service that provides several levels of identity theft protection. Their standard service provides monitoring of black-market websites to notify you if your personal information has been compromised.
One unique offering of LifeLock is their pre-approved credit offer reduction service. This can be useful for people who don’t want to constantly be bombarded with offers for new credit cards and lines of credit through the mail.
All LifeLock plans offer 24/7 support and assistance with identity theft issues.
TransUnion is another credit monitoring service that is designed to prevent identity theft and give you peace of mind. With TransUnion’s service, you get:
- Unlimited updates to your credit score and monitoring (TransUnion’s score and file only)
- Email alerts for any detected changes to your TransUnion credit file
- Personalized debt analysis based on your current credit profile
- Up to $1,000,000 in Identity Theft Insurance
This is a very simple service that offers the basics for anyone who just wants to have solid protection without a lot of bells and whistles.
Identity Guard offers several tiers in their credit monitoring services. At the high end, their Identity Guard Platinum service monitors all three credit bureaus for fraudulent activity.
It keeps track of your public information and alerts you if changes are spotted, and provides monthly updates to all three credit scores. This is in addition to other services such as identity theft assistance, and social security number monitoring.
The Identity Guard Essentials version does not keep track of your credit scores or changes to your credit reports. However, it is useful for monitoring your personal information and receiving alerts if that information is found on websites where scammers are known to buy and sell information.
Their identity theft assistance is also standard and will help you with completing the many steps you need to protect yourself if your identity is stolen. Also standard across all plans is their $1 million identity theft insurance designed to help you minimize losses if your information is compromised.
Experian offers credit monitoring services and identity theft protection through its Protect My ID service. It’s more basic than what’s offered through Identity Force or Identity Guard as there is no option to track your credit scores.
Instead, Experian’s credit monitoring service keeps track of:
- Credit report changes
- Unauthorized use of your social security number, debit, or credit cards
- Any unauthorized change of address
In addition, the service offers assistance with fraud resolution in case your identity is stolen or there are unauthorized charges on your accounts. As with the other options we’ve covered, Experian offers $1 million in identity theft insurance to minimize the risk of losses.
How Do Credit Monitoring Services Protect Me?
Credit monitoring services work by keeping track of your credit files at the three major credit bureaus. If there are changes found in your credit files, you will be alerted through email or a text message. Once notified, you can take several actions:
- For new, unauthorized accounts you can contact the credit issuer and get the account shut down.
- If you have unauthorized charges on existing accounts, you can file a dispute
- If some information on your credit profile is inaccurate, you can request corrections
In the case of negative items on your credit report such as late payments or accounts that are in collections, having a credit monitoring service can be a useful way to rebuild your credit and make sure that your information is being reported correctly.
This is especially the case when it comes to credit card limits, because companies may raise or lower your limit without warning, which means the only way to stay on top of your credit scores is to monitor your current credit account for just such changes.
Once you’ve decided to invest in a solid credit monitoring service, the next step is to narrow down your choices until you feel what’s right for your particular situation.
What Do I Do If My Credit Monitoring Service Finds a Problem?
Once you have credit monitoring in place, it may be tempting to “set it and forget it” but that’s not the best way to keep yourself protected. Be sure that the emails and text alerts from your credit monitoring service aren’t sent to spam or blocked.
If you do have your accounts compromised, the faster you are able to respond, the better your outcome will be. When you receive an alert:
- Respond promptly – contact your credit monitoring service and find out which steps they can handle for you
- Provide information quickly – if you have a support team in place to fill out paperwork on your behalf, make sure they have the information needed
- Follow-up regularly – make sure everything is handled in a timely fashion to avoid being liable for debts and fraudulent charges
With the right credit monitoring service in place, you can prevent huge financial losses and keep your good credit safe from scammers, thieves and fraud.