Great Lakes

Credit Monitoring Services 101

December 6, 2017

Do students you work with ever wonder if they should be using a credit monitoring service? If so, read on for basic pros and cons of using credit monitoring services, and tips you can share with students who are comparing services.

What is a Credit Monitoring Service?

Credit monitoring services track your credit report at one or more of the three major credit bureaus and immediately alert you of any changes, unusual inquiries, or suspicious activity. Credit monitoring services vary by provider, but may include:

  • Sending you a text, email, or letter if there's an inquiry or other activity on one or more of your credit accounts
  • Offering unlimited access to your credit report from one or more of the credit bureaus
  • Tracking your credit score
  • Assisting you with fraud resolution via telephone
  • Reimbursing you for part of your out–of–pocket expenses incurred while resolving fraud or identity theft

Basic credit monitoring services will detect some problems related to fraud—for example, if someone opens a new account in your name using stolen information. If someone uses your information to get a job or a cell phone, however, this may not register on the radar with credit monitoring service providers. In an attempt to detect a variety of fraudulent uses of your identity that may not show up immediately on your credit, some providers have added the option of also searching public records, databases, and websites for use of your personal information (e.g., court records, real estate transactions, telephone accounts, hunting/fishing licenses, etc.).

What credit and identity monitoring services can't do is prevent fraudulent activity or ensure the safety of your identity. They may make it easier for suspicious activity to be detected, but you should still be diligent about self–monitoring.

Learn More in New Free Training

Check out our new SmartSessions webinar, Identity Theft: Protecting Yourself from the Creative Criminal to learn more strategies for monitoring personal information. Other topics covered include:

  • Newer tactics criminals are using
  • Proactive steps to minimize your exposure to criminals

If You're Not Using Credit Monitoring Services

If you're vigilant about checking with credit bureaus on an annual basis, you may not need a provider to do this for you. Keep in mind that, in addition to checking with the bureaus annually, you should be watching bank and credit card activity and statements on a regular basis, since it can take a while for fraudulent use of one of your existing credit cards or accounts to show up on your annual credit report check. Even if you have credit monitoring services, you'll want to watch your account statements for administrative errors or unauthorized use that can cost you money.

If you suspect fraudulent activity on your account, you can place a temporary fraud alert with one or more of the credit bureaus. This alerts the credit bureau to watch for unusual activity on your account and alert you if they see anything suspicious.

A more drastic move is to enact a credit freeze. This makes it impossible for creditors to check your credit or for anyone—including you—to set up new accounts. This may be a more practical solution for older people who aren't applying for jobs or apartments, and who may have all the credit they need. But for active college students, keep in mind that un–freezing credit to open new emergency accounts can take a while. While freezing your credit is generally less expensive than the annual cost of credit monitoring services—which ranges from $150 to $300 and up—there are fees to freeze your credit and to cancel those freezes. (Fees vary by state.)

Let's say you've been a victim of identity theft or you fear your personal information has been compromised. For example, if you receive notice that there was a data breach at a store for which you have a credit card, your personal information may have been compromised. If the store doesn't offer free credit monitoring services through a provider for a period of time, it may be something you want to consider doing on your own.

Choosing a Credit Monitoring Service

These services are typically provided by banks or credit unions, or directly from companies. It might be best to start with a financial institution you've had experience with, and already trust, since there are predators in this market.

If you go with an unfamiliar company, check out the provider carefully before signing up. Check with the Better Business Bureau to see if any complaints have been filed against the provider, consider how long the company has been in business, and identify the level of security expertise they have. If their website doesn't contain much substantive information—or they promise they can prevent you from being a victim of identity theft—be skeptical.

Questions to Consider

  • Does the provider monitor your credit report at one, two, or all three bureaus? How is it monitored?
  • Does the service provide you with unlimited access to your credit reports? From one or more credit bureaus?
  • Will you have unlimited access to your credit score(s)? From one or more bureaus?
  • What kinds of activities trigger an alert—and can you choose how you're notified?
  • If you receive an alert, is help readily available? During what hours? Do phone agents have expertise?
  • What's included in additional identity monitoring services offered by the provider? Which databases are monitored, and how often?
  • If identity theft insurance is included, what costs does it cover (e.g., phone bills, legal fees, time off work, etc.)?
  • What other services (e.g., computer protection, wallet loss assistance, etc.) are included and/or offered, and what are additional fees?
  • Is there a free trial period? How and when do you need to cancel to avoid charges? What types of payment methods are accepted?

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