Credit monitoring: What it is and why you may or may not need it.
Credit monitoring services are deployed primarily to keep an eye on your credit profile, including your credit report and credit score. It can be treated as an early warning system of any potential fraud that can prevent further damage.
Lately, monitoring services are becoming increasingly popular. Technology has embraced the concept with robust credit monitoring apps and software. So much so that it begs the question, do you need to pay someone to monitor your credit? That part is up to you. While consumers do have the tools needed, they don’t always have the time, or desire to monitor their own credit.
This is where credit monitoring services come in. Instead of spending your own time monitoring your credit, you can pay a company to do so. They’ll only let you know when something arises.
The question is, are they really worth the investment?
Can a consumer monitor their credit independently?
Credit monitoring services often showcase themselves as guardians of your credit profile. They are in a sense, but this protection comes at a cost. A consumer can absolutely monitor their own credit, and in most cases, for free.
A monitoring service may be ideal for elderly people, saving them the hassle of learning new software.
How to be your own credit monitor?
The first thing to know is that credit monitoring can be done completely free. Of course, there is cost involved, but that comes in the form of time and effort spent on your part to manage your credit yourself.
Request a credit freeze.
A consumer can request their credit be “frozen” at any time. This will block any requests or changes to your report or score during the freeze. Because there are three major reporting bureaus, this request needs to be made with all three.
Sign up for a service from a personal finance website or credit company offering free credit monitoring.
Companies like Credit Karma and Credit Sesame offer free tools so you can watch for fluctuations in your credit. These services even offer free advice and tips for specific credit situations.
Pull your free, full credit report once a year for a deep dive.
Once a year a consumer can pull their complete credit score and report. This is a great opportunity to deep dive into the past years credit history. You can take advantage of this consumer right by visiting freecreditreport.com.
What credit monitoring can’t do?
Here are some feature facts which the credit monitoring companies can’t do:
- Promise prevention of credit card or identity theft fraud.
- Avoid your receiving or opening phishing emails.
- Guarantee detection of fraud.
- Correct errors on your credit report.
- Stop taxpayer identity theft.
Paying for a credit monitoring service.
If you’re unsure the do-it-yourself method is for you, or just willing to pay for extra protection, look for a company that offers both credit monitoring and theft alerts.
If you find yourself in any of the below categories, you may be a good candidate for professional credit monitoring services.
- You are a victim of identity theft or if your SSN is disclosed in a data breach. This also applies if you lose your social security card.
- You don’t want to credit freeze your reports. You may have upcoming purchases you need your credit visible for. If this is the case, freezing your credit for protection won’t be an option.
- You don’t have the desire, know-how, or time to monitor your credit independently.
Be cautious when monitoring services are offered for “free”.
If you fall victim to a data breach or other security mishap, it’s common to be offered free monitoring services. But be cautious to read the fine print, and understand when the offered free service ends and how to cancel it. Even as a gesture of good faith, that free service likely has an expiration, and a monthly cost that follows.
For example, the free service you are offered might include monitoring from just one of the three major agencies, and only for one year. So, you’re now partially protected. True credit monitoring requires visibility into all three credit reports to be certain no discrepancies are present.
Credit report and credit scores from all three bureaus can be accessed for free by visiting annualcreditreport.com and from some other websites too, such as Credit Karma, Credit Sesame, and Quizzle.
Credit Karma: Best Free Credit Monitoring.
CreditKarma.com proves to be the best free credit monitoring service. They have built great credibility and offer an easy to use interface for any skill level.
Credit Karma updates your credit score – Vantage Score 3.0 – every time you log on to your account. It updates your credit report info weekly. Along with monitoring your credit score, you can also receive alerts when unusual activity is suspected on any of your two credit reports. While the service from Credit Karma is free, it’s only drawback is that you will not get access to one of your credit reports.
Credit Karma does not include Experian data, one of the big three credit reporting agencies. However, Experian.com offers their own monitoring. While this is an additional service to sign up for, it’s also completely free and quite simple. Bottom line is that you can accomplish most credit monitoring tasks on your own, for free or very close to it. Pay for credit monitoring only if you know you have been a victim of identity theft. Don’t let monitoring lull you into complacency.
It’s easy to hire a company and think your cares are over. The reality is, the safest way to maintain your credit is by monitoring it yourself. No one knows your financial situation like you. You’ll be much more in tune with discrepancies and mistakes on your own report than a company with no familiarity into your financial history.