Should I pay for Credit Monitoring?

april 21, 2021 | credit monitoring
Think Before You Click

A number of services want to monitor your credit files—for a fee. Skeptics declare it’s a waste of cash because you can monitor your credit. Yes, it’s possible but also time-intensive. The decision for any purchase under consideration ends as a balancing act between your bank balance and plans for your free time. In other words, how many hours can you afford to spend guarding all-important credit details?

Scope of Credit Monitoring

It’s vital to define what credit monitoring covers as your first step. This type of data monitoring is a simple process. It involves frequent checks of credit reports, credit scores and harmful data entered into your credit file.

You could complete all these functions yourself, but it can take hours to complete a checklist each week and may incur costs. Due to the pandemic, credit report checks are free once each week, but that deal could expire in April 2022. In a more typical year, you’d get one free credit report access only once a year from the large bureaus. Extra reports and credit score requests will cost money.

Credit monitoring should catch these red flags:

  • New accounts after they are opened in your name
  • Significant changes in credit scores
  • Negative information added to your file
  • Large swings in credit balances to check

All these features are essential, but they won’t provide total protection or root out all the damage scammers will inflict.

Compare Options

Now dive into a deep inspection. Not all credit monitoring is identical. Some companies check just a single credit bureau. Experian, Transunion, Innovis and Equifax are the large bureaus, but dozens of specialized credit reporting agencies also exist. Will the service you favor check tenant rental reports or accident insurance claims? Do you need those checks?

The Fair Credit Reporting Act requires any information about fraud or errors that you report to one bureau must be shared with the others. It’s not wise to rely on this bureau-to-bureau exchange of data to operate flawlessly, though; sometimes, the process breaks down. A credit dispute, for example, needs to be added to all your files, but it may not spread without a nudge. Be sure to double-check or file multiple reports.

Will you opt for less expensive or free options that check just one credit bureau routinely? Would you prefer a company that scans at least three firms regularly to deliver a broader picture of your credit health? Decide what makes sense for you and your search narrows.

Then examine the complete list of services your top choices provide. A critical omission on one list could be the decisive factor.

Delve into the firm’s method for sending out fraud alerts. Email, phone text or phone call? Which is best for you? These heads-up notifications should arrive ASAP—preferably while you’re still in the store filling out loan forms for that new refrigerator you’ve been eyeing. Some services will text you within a minute if you apply for credit, and the lender requests a report.

What Credit Monitoring Can’t Do

Understand the limitations of the service you’re checking. It will not stop someone from opening new accounts in your name; it will simply alert you shortly after fraud occurs.

Here are additional features that credit monitoring may not offer:

  • Help to correct any credit report errors
  • Assistance in freezing credit reports
  • Notifying the credit bureaus of fraud
  • Placing fraud alerts, so creditors require further ID before granting credit
  • Detect exposure of your Social Security Number (SSN) on the Dark Web where criminals lurk
  • Alerts if subprime loans crop up in your name
  • Monitoring change of address forms filed in your name that could divert mail, checks and credit cards to a hacker’s house
  • Court records reviews that could damage your credit score

Confused by the Offerings?

It’s easy to get baffled. The terms “credit monitoring” and “identity monitoring” are often used interchangeably, but they are not the same. In reality, credit watch is often part of identity services. Still, standing alone, credit monitoring doesn’t generally check criminal records, social media accounts and other elements that are part of a complete plan to shield your identity. If those are important to you, compare prices with full-service identity monitoring. It may be roughly the same as credit monitoring.

Credit checks may not monitor for payday loan fraud, but most identity packages do. Thieves can obtain these loans in your name with just a handful of personal details because a formal credit check is rarely required. You won’t discover this variety of identity impersonation until the loan slides into default, and it’s turned over to a collection agency. Then credit monitoring will pick up the fraud as you watch your credit score slide.

Shield Yourself

Some folks wonder whether a credit freeze is good enough. These can provide some of the protections of credit monitoring; if you lock down your reports, lenders cannot pull your record to make a credit decision. New accounts won’t pop up that you didn’t open.

Just understand that you’ll need to thaw your files if you want new credit; that can take hours or days to appear in files depending on your request. Instant credit decisions won’t be possible when you apply for loans until the thaw is complete. A freeze makes fraudulent accounts harder to open, but it also restricts your legit attempts to apply for credit on the spot.

Don’t confuse freezes with fraud alerts, either. Alerts are simply an indicator added to credit reports. This flag advises lenders to ask for extra identification to confirm the applicant’s true identity.

Credit monitoring cannot protect your data from being stolen or leaked online; no service can achieve that. It watches for your data, and if that info’s stolen, it will notify you. Haste is essential in notification since the longer the data’s out there to abuse, the more identity theft damages and bills can pile up.

IDShield is a product of Pre-Paid Legal Services, Inc. d/b/a LegalShield (“LegalShield”). LegalShield provides access to identity theft protection and restoration services. For complete terms, coverage, and conditions, please see an identity theft plan. All Licensed Private Investigators are licensed in the state of Oklahoma. This is meant to provide general information and is not intended to provide legal advice, render an opinion, or provide any specific recommendations.