Is Credit Monitoring Worth the Cost?

Almost every day we hear about another data breach at a major company, healthcare facility or financial institution. What can you do to protect your information?

Several independent companies have sprung up that promise to help protect your identity, such as LifeLock®, IdentityForce®, Identity Guard® and TrustedID®. They do this through credit monitoring and sending you alerts when changes to your credit occur – such as when a new account is opened or a new address associated with you is submitted to a credit reporting company. Some of these companies are operated by credit reporting agencies such as TransUnion and Experian.

Credit monitoring services generally cost $10 to $15 a month. Should you pay for credit monitoring? Many consumer protection groups are hesitant to recommend these services, mainly because of their limitations:

  1. Notification after the fact. If you receive a notification from a credit monitoring company, your information may have already been used illegally. A new account has been opened and you’ve been victimized. Some companies are addressing this problem by sending alerts to you if anyone tries to open a new line of credit. You’re asked to confirm that you are in fact applying for a new account.
  2. Activities not monitored. Credit monitoring services can’t cover every facet after you’ve been a victim of identity theft. For example, using your identity to get a payday advance loan, a driver’s license or a job are activities that could go largely unnoticed by a monitoring service.
  3. You can do it yourself. Most of what credit monitoring companies do you can do yourself for free, or at least obtain the service for a discounted fee. You can file fraud reports and place fraud alerts and credit freezes on your credit files with credit reporting agencies. However, you can choose to pay for credit monitoring services for the convenience of not tracking it yourself.

 

Free credit report

Get your free credit report each year from AnnualCreditReport.com. Beware of imposter sites that are trying to sell you credit monitoring services. Help yourself by setting up a recurring reminder on your phone every four months to remind you to pull a report from one of the credit bureaus.

 

Additional steps you can take

  • Check your bank and credit card statements monthly for any unauthorized debits.
  • Leave important documents in a safe place at home.
  • Only carry the credit cards or other cards you plan on using frequently. Do not carry your Social Security card.
  • Properly destroy old credit cards, checks, bank statements and receipts.
  • Shop only on secure websites—with companies you trust.
  • Personally check your credit report at least once a year.

When there is a breach, there may be a free credit monitoring service offers. Take advantage of those.

References: Forbes, WiseBread.com

 

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