Credit Monitoring Services: Are They Worth It?

Several companies have sprung up which promise to help protect you against identity theft. How do they do this? By monitoring your credit. They alert you when changes to your credit happen. This could happen when a new account is opened or a new address associated with you is logged with a credit reporting company. Some credit monitoring services are independent companies. Some are operated by credit reporting companies such as Transunion. There are three main problems with these services:

• Most of what these services offer you can do yourself.
• When you are alerted to a problem you already have the problem.
• They cannot catch forms of identity theft that don't access your credit report.

Convenience and Service

The first of the three issues is the least of them. Most of what credit monitoring companies do, you can do yourself, some of it for free, such as filing fraud reports with credit reporting companies and having fraud alerts and credit freezes placed on your credit files. However, it might be easier for you to let someone else worry about it so you don't have to. You're paying for convenience and service.

Notification After the Fact

The second issue is that once you are alerted to a problem, your identity and your credit records may have already been used by an identity thief. The new account has already been opened and you have been victimized. Some companies are trying to address this. They place fraud alerts with the credit reporting companies so that if anyone tries to open a new line of credit, you are notified and asked to confirm that you are applying for a new account. You might find value in this type of service. It protects you from one of the most common forms of identity theft attack, which is trying to establish new credit or take over existing credit.

Activities not Monitored

The third, and most disturbing issue is that not all identity theft related activities will include accessing your credit report. This is the big one. Credit monitoring services can only cover so many activities. Payday advance loans, using your identity to get a driver's license or using it to get a job are three of the activities that might go completely unnoticed by a credit monitoring service. After all, a state's department of motor vehicles doesn't run a credit check when someone applies for a license or an identification card. Credit monitoring companies can help protect you from some, but not all, types of identity theft.

Additional Steps You can Take

Many people believe that credit monitoring activities will make them secure against identity theft. That simply isn't true. However, credit monitoring can be an important piece of your protection package. Some other things you can do include:

• Make sure you leave important documents at home in a safe place.
• Only carry with you credit cards or other documents that you plan on using that day.
• Make sure to properly destroy old credit cards, checks, and unneeded receipts.
• Shop online only on secure sites with companies you trust.
• Check your bank, cell phone and credit card statements monthly for any suspicious activity.
• Personally check your credit report at least once a year.

There is no way to protect yourself 100% against identity theft, but every little bit helps. Credit monitoring services generally cost $10 or $15 a month. Think of it as an extra insurance policy. If you are going to go with a credit monitoring company, shop around. Find out who has the best prices, the fastest service, and the best track record for safeguarding its customers. Also, don't forget to take an active role in the entire process. It's your identity and if you don't protect it, no one else will be able to.

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