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.
Using A Credit Monitoring Service To Protect Your Credit History
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:
- 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.
- 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).
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
There are people who would rather pay for someone else to package their credit information in an easy to digest fashion. It can be pretty convenient when such services offer you access to your credit score and report as well as to automated alerts on credit changes (to all 3 credit reports from major credit bureaus). Other benefits include getting to see your FICO credit score (this is not easy to get for free) and receiving some amount of identity theft insurance. The downside? The main disadvantage is that you’d have to pay up. For some, it’s worth it; while others prefer to try something else.
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 or cheap 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”. Simple suggestions for heightened vigilance include: evaluating your bank accounts on a regular basis, ordering free annual credit reports from the bureaus, using fraud alerts or security freezes. For all these cases, there are pros and cons. Let’s go over these ideas to monitor your credit in more detail:
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 credit reports at AnnualCreditReport.com or from the 3 major bureaus once a year. Be aware though, that while AnnualCreditReport.com will allow you to check your credit report for free, they don’t provide you with your credit score, so you’ll have to get a hold of this information some other way.
2. Free Option: Certain services offer free proprietary credit scores. If you need to know your credit score, then it’s important to understand what it is you’re getting. There are credit scoring variations that exist that have been the source of confusion for consumers (including myself). You can get free credit scores from companies like CreditKarma.com and Quizzle.com, but these are non-FICO proprietary scores that may vary from the standard FICO scores most people use. If you’re open to sharing your social security number and can accept a non-FICO score, then these sites are a good place to visit. Check out our post on how to get free credit scores for additional information.
3. 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.
4. 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.
5. Semi-Free Option: Try credit monitoring services with free trials.
Then there are services that shout to the world that they’ve got free credit reports and scores for the taking. The truth is, companies like Go Free Credit, FreeCreditReports360.com and FreeCreditReport.com only offer free trials, where you get a taste of their service or product for a limited period of time, typically 7 days. If you sign up, be aware that you’ll be automatically enrolled in a service that will charge you a monthly fee unless you cancel by the end of the trial period. I know a few people who go this route and just cancel the service after the trial is over.
6. Free Option: Check out your Identity Score. Another option is to check on your ID score to evaluate your risk of identity theft. The site My ID Score offers a free service to help you determine if you’re vulnerable to id theft or fraud. Knowing your score may allow you to take proactive steps towards increasing your identity protection. If you’re at risk for identity theft (as per your ID score), then double your efforts to monitor your credit! As you can see, there are many ways to go about keeping an eye on your credit; it just depends on what you’re looking for.
7. 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. The bureaus will seal your credit information until you tell them otherwise. It’s a bit of a hassle but you won’t have to pay much to do this. But note that it may not be a good idea to try if you need to access your credit reports often, or if you are opening accounts on a regular basis. This can become a major inconvenience in certain cases, as 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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