Why get identity theft protection?
Why Monitor Your Credit? My Id Theft Story
I know someone who would have benefited greatly from some form of credit monitoring. He’s someone in my family who doesn’t follow his finances too well — someone like him would benefit from putting things on autopilot. Especially since one day, when applying for credit, he suddenly discovered no less than FIVE new accounts opened under his name but with different addresses. Five foreign names, nonetheless. It turned out to be just the tip of the iceberg for him. If he had some way of being alerted to these issues sooner, it would have saved him a great deal of pain and inconvenience.
Should You Try A Credit Report Monitoring Service?
If you’re looking into credit monitoring services, know that they’re intended to let you know whether your identity has been compromised: you are alerted quickly of any identity fraud that may have taken place against your accounts so that you can take action before more damage can be done. They’ll alert you to problems that they pick up from reviewing your credit report. They are known to be effective with catching the fraudulent creation of new accounts. Some well known services:
- myFICO: The company behind the FICO score system has a few different products to help you keep tabs on your credit score. You could go with quarterly monitoring for $4.95 a month or pick from the other packages (such as their FICO Score Watch). Here’s more on myFICO’s products.
- LifeLock: For $10 a month, they’ll contact credit bureaus and ask them to put a fraud alert for you every 90 days. They’ll opt you out of pre-approved credit card offers, order your free annual credit reports, assist you if you ever lose your wallet, notify you of suspicious activity on your report.
- TrustedID: for anywhere from $8.25 to $15.83 monthly, you can have individual or family credit reports monitored, including the use of your medical and social security benefits. You also have the ability to initiate a credit lockdown so your credit reports cannot be released to others.
- Equifax has its ID Patrol, which locks down your credit file with them, monitors three credit bureaus as well as internet activity, and gives you identity theft insurance for $9.95 to $14.95 per month. You can also check out other Equifax products here.
There are many more such monitoring and credit repair services available but they aren’t as recognizable as the names I listed above. Plus, they’re pricier (some of them are charging $30 a month)!
Tips For Using Credit Report Monitoring Services
Despite their cost, people are signing up to credit monitoring services. As you shop for a credit monitoring service, make sure to see what good they do, and what limitations they have so you can make the right choices. Be careful not to get a false sense of security when using such a service, by knowing what they do and do not cover. For instance, some of the services I’ve canvassed specifically point out that they only check the information you have with certain credit bureaus.
Is “something better than nothing”? In my opinion, these services may be best for people who’d like someone else policing their reports, even on a partial basis. Again, it’s a form of insurance to reduce the risk of identity theft, where you buy some peace of mind. To some, that peace of mind is worth whatever it is they pay.
Prevent Identity Theft: Free or Cheap Ways To Monitor Your Credit
What’s important to note is that there are also free ways to monitor your credit, but it will take effort and diligence on your part to track your credit ratings this way. These are great for “do it yourselfers”. For all these cases, there are pros and cons. Here are some ideas for free or cheap ways to monitor your credit:
1. Free Option: You can track your own credit reports and scores. You can do it yourself, but you’d want to do this on a regular basis. Pick up your free annual credit reports at AnnualCreditReport.com and check out our post on how to get free credit scores.
2. Free Option: Set up fraud alerts on your credit information. You can contact your credit bureau and request alerts on your credit report every 90 days (it may be renewable) so that you’ll get creditors to call you first for verification before they extend credit or open a new account. But I read that there are some caveats to this and may not be available as a long term solution.
3. Free Option: Check with your financial institution if they’ll offer you free monitoring or if you’re eligible for it. Some of them have this available to customers who sign up for certain specific financial services or products.
4. Cheap Option: You can opt for a security freeze, which “freezes” or locks your credit information at all three reporting agencies unless you unlock it with a password or PIN. It’s best for people who don’t need to apply for credit and who don’t need others checking on their credit often. Otherwise, having to use a password or PIN can be a pain. But hey, lifetime protection with a security freeze is only $30, so it’s one cheap way to get some security!
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{ 9 comments… read them below or add one }
Great post! In the banking industry, we’re seeing an influx of identity theft, especially with all of the consumer breaches that have been happening. People aren’t taking this seriously enough until it’s too late. Great tips here!
I personally like the FICO score watch. It’d been an invaluable tool for me, particularly when I was working my way out of debt. Not only was I constantly monitoring the changes in my score, but I was also able to keep an eye on my records. If anything looked suspicious, I was able to get it resolved immediately. I especially liked that myFico sent email alerts on various things to help me keep track.
Nowadays, credit cards represents a major importance in the life of an individual. This is to permit people to purchase the things they wants and likes anywhere and anytime. It may help for emergency causes like medical bills and other transactions. some adults could develop more moral codes and stronger ethics for facing their credits and have the initiative to pay for the bills. They would also consider the gratification for the delayed finances that they should also be concerned. It has a big benefits for an individual to utilize their self-confidence if they have to be at the stage for credits or for having a money-keep.
Somebody opened a credit card account in my husbands name and hit the bank for $15,000. They fixed it for him and put a freeze on his accounts at no charge. It was clearly their mistake because they didn’t even follow their own rules. It shocked us how easy it was to do.
Everyone says lifelock is the best, or at least the few people I spoke to about it and things I’ve read up on. Do you recommend one over the other? For a younger person in early 20’s and single, would you recommend? Sure it sounds great, but another $100 for something adds up.
Good article. After my mail was found as part of an FBI recovery, I became aware of the reality of identity theft.
I can’t say that I have had my identity stolen, although I have had my credit card and bank card skimmed on more than one occasion. I think it is important that we monitor credit so we can catch it before it is to late.
I found something scary today as I stumbled upon a forum. Contained within this forum were the credit cards and names of many users. I am assuming that there were hacked from a merchant site that does not use tight enough encryption.
Secure your finances!!!!!
Many consumers are in the habit of using passwords such as date of birth, mother’s maiden name, pet names, and children names for the ability to gain access to email and other other secure websites. Identity thieves recognize this and are able to figure out these types of passwords easily.
It is not always possible to stop our identity being stolen. That is why I always take care of my personal data and always have a high index of suspicion.
Interesting post. However, I’d even go for more prevention. These services are probably really good, but they come into action when someone is already trying to fool around with your accounts.
What people should realize is that they should not let any personal information accessible to others. You could start with destroying all your CDs and DVDs before throwing them in the garbage bin, like described in this post.
Then destroy hard disks before disposing of a PC. And I’ve seen new USB memories on the market that require a PIN code before accessing the data. Everybody should use those for personal data!