With increasing concerns about private computer hacking, corporate data breaches, and identity theft, people are taking a fresh look at credit monitoring services. Target offered free credit monitoring for those who were affected by their data breach, and there is little reason not to accept their offer given the circumstances. But are these services worth paying for?
Credit monitoring can be purchased within packaged deals at the three credit reporting agencies (Experian, Equifax, and TransUnion), or through third-party companies. The main services they provide are regular monitoring of your credit reports – typically with all three agencies, but this should be verified – and some form of alert regarding any credit request or significant change in your credit information. Some services also look for suspicious bank account activity.
Depending on which vendor you choose and how much you want to pay, there will be other options included. You may get regular summaries, online access to your credit information, assistance with dispute resolution, identity theft protection and insurance, and other services.
There is only one problem – none of these things are pre-emptive. They all deal with issues after someone has tried to misuse your information.
Another consideration is that these services cover a narrow slice of the bad things that can happen via loss of your information. If instead of opening a new account, thieves chose to drain or abuse your existing accounts, a credit monitoring program generally has no way to pick up on that. Nor can they help in cases like fraud related to government benefit programs, or opening of wireless accounts or pay television/data services using your illegally obtained information.
So why would you want this service at all? It does shorten the detection time, and it does allow you to respond faster to limit the damage. Unfortunately, repairing credit damage is a marathon, not a sprint.
What about the extras? Reviews are generally mixed. For example, reviews on dispute resolution services vary greatly, but in the end, all they are providing is assistance. They cannot resolve anything themselves. Similarly, the insurance covers expenses incurred in restoring your credit and cleaning up the mess – but they do not reimburse you for any money that was stolen.
Read the details of the services carefully, and check online reviews to see if you think the services they offer are worth the cost.
A different useful technique is to initiate a security alert on your behalf with one of the credit reporting agencies. Filing with one is sufficient; the agency you file with is required to notify the others. This necessitates that you be contacted to verify that any credit request made in your name actually comes from you.
Unfortunately, security alerts are only valid for 90 days, unless you were actually an identity theft victim with tangible loss and a filed police report. In those cases, you may be able to extend the alerts for up to seven years. However, you can place new security alerts every 90 days and produce relatively continuous coverage.
If you have been a previous victim through a known data breach or have reason to suspect problems, credit monitoring may be worth it just to provide peace of mind. For most of us, the key services that credit monitoring offers can be handled through other means, or by things that you can do yourself – such as regular monitoring of your accounts, and obtaining your free credit reports. Don’t forget that by law, you are allowed one free report each year from each agency.
The bottom line is that free credit monitoring is always worthwhile, but for many people, credit-monitoring services may not be worth the cost.
If you would like to monitor your credit to prevent identity theft and see your credit reports and scores, check out our credit monitoring service.