Credit Repair

Is Credit Monitoring Worth the Cost?

Keeping your personal information under wraps may be harder than ever. There are hundreds of data breaches each year, and you don’t necessarily have control over which companies have your information on file.

A recently implemented federal law makes freezing your credit free, which can help keep someone else from opening an account in your name. It also requires the credit bureaus to extend fraud alerts (which are also free) on your credit reports to one year rather than 90 days. You may want to add an alert if you think you’ve been a victim of identity theft.

What else can you do? You can sign up for a credit monitoring service. These services actively track changes in your credit reports. Although credit monitoring won’t prevent identity theft, it can help you get ahead of fraudsters and limit or prevent the damage they can cause.

What is credit monitoring?

Credit monitoring can encompass a range of services and features.

A basic credit monitoring service may track one or more of your credit reports from Equifax, Experian or TransUnion. If it detects new and potentially suspicious activity, it will send you an alert.

Making your normal monthly payments generally won’t lead to an alert, but a new hard inquiry could. A hard credit inquiry is the result of a creditor reviewing your credit report before making a lending decision, and it could indicate that someone applied for a new account in your name.

If you didn’t apply for an account, you could spring into action right away by contacting the creditor and asking why it reviewed your credit report. If it was an attempt to open a new account, you may even be able to close it before a fraudster can use it.

Other suspicious activities that could indicate whether someone is fraudulently using your identity include:

  • New accounts or collections appearing on your reports
  • A change in your personal information (such as your name or address)
  • A late payment on an account you haven’t recently used

Some services provide additional features, although there may be a cost depending on the level of service or benefits you choose.

For example, some credit monitoring programs include identity recovery services that can help you manage your personal information and accounts after your identity is compromised. You may also receive insurance that can reimburse you for expenses related to identity theft or fraud.

There are also credit monitoring services that go beyond monitoring your three credit reports to look for your personal information on the dark web (part of the internet that’s only accessible with special software), court records and databases.

These more comprehensive programs are sometimes called identity monitoring services rather than credit monitoring services.

Is it ever worth paying for credit monitoring?

A wide range of companies offers credit monitoring, including the three national credit bureaus, FICO®, personal finance websites and identity theft protection companies. The cost of credit monitoring can vary depending on the provider and the level of service.

Some of the programs that let you check your credit scores for free also include free credit report monitoring. The free options may even include daily monitoring and identity theft insurance and support. However, they generally only monitor one or two of your credit reports.

If you’re looking for basic credit monitoring, signing up for two or three free programs that, when combined, monitor your credit reports from Equifax, Experian and TransUnion may be sufficient.

The paid credit monitoring services won’t necessarily monitor your reports any better than a free service. Paying a subscription may only be worth it if you want to have one program that monitors all three of your credit reports. Or if you want more comprehensive identity monitoring, resolution assistance or insurance.

Paid credit monitoring or identity monitoring services often cost around $10 to $30 per month — and some have a free or discounted trial period. There are also programs that offer a discount on couples or family plans and you may be able to save money by paying an annual rather than a monthly fee.

Free ways to monitor and protect your credit

While it can require a little extra work, the free approach is certainly an option for consumers. Here are two steps you can take to help track and secure your credit reports for free.

Get free credit monitoring of all 3 bureaus

Create accounts with two or three programs that will provide combined coverage of all three credit bureaus. For example, LendingTree’s free credit monitoring program will alert you to changes in your TransUnion credit report (you can even get push notifications via the My LendingTree app). Then, sign up for other free programs that monitor your Equifax and Experian reports.

Freeze your credit reports

In addition to signing up for free credit monitoring — even if you’re using a paid credit monitoring service — freezing your credit reports could help prevent someone else from opening an account in your name. Once frozen, your credit report needs to be “thawed” before the bureau will send it to a creditor that you don’t already have an account with.

When you freeze your credit, you can create or be given a PIN that you’ll need to thaw your report. You can quickly unfreeze your report indefinitely, or unfreeze it for a specific period of time, such as a couple of days while you apply for an auto loan.

You can freeze and thaw your credit files for free online by visiting the Experian, Equifax and TransUnion websites. As with credit monitoring, it’s best to get full coverage by freezing your reports with all three bureaus.

 

Looking for ways to increase your credit score? Get a free credit consultation today!

You can do something about your debt, right now.

  • Answer a few questions

  • We'll analyze your credit and debt

  • You'll receive instant, custom recommendations