Consumer Law

Credit Monitoring Services: Are They Worth It?

Several companies have sprung up that promise to help protect you against identity theft. How do they do this? By monitoring your credit. An alert is sent to you when changes to your credit occur such as 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 and Experian.

While in theory these are good services to use, there are three main problems with these services.

  • 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.
  • Most of what these services offer you can do yourself.

Notification After the Fact

If you receive a notification from a 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 by sending alerts to you if anyone tries toopen a new line of credit. You're asked to confirm that you are in fact applying for a new account. This service protects you from one of the most common forms of identity theft, establishing new credit or taking over existing credit.

Activities not Monitored

This is the most disturbing issue that has nothing to do with credit monitoring. Credit services can't cover every facet after you've been a victim of identity theft. Payday advance loans, using your identity to get a new driver's license or using it to get a job are three activities that could go largely unnoticed by a monitoring service. The motor vehicles department doesn't do a credit check when issuing a license or ID card.

Convenience and Service

Most of what credit monitoring companies do, you can do yourself. You can file fraud reports and place fraud alerts and credit freezes on your credit files with credit reporting companies. However, you can pay a credit monitoring services for the convenience of not tracking it yourself.

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:

  • Leave important documents in a safe place at home.
  • Only carry the credit cards or other cards you plan on using that day (do not carry your Social Security Card).
  • Properly destroy old credit cards, checks and unneeded reciepts
  • Shop only on secure Web site with companies you trust. Look for trustmarks from companies such as VeriSign.
  • 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.

Question for Your Attorney

  • How can I receive an alert if someone tries to open a new line of credit under my name?
  • How do I prevent someone from obtaining a driver's license or ID using my information?
  • I have a really busy schedule, can a credit monitoring service help me file a fraud report?
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