Understanding Credit Monitoring Services: Costs and Benefits

Like your expenses and income, your credit significantly affects your accumulative finances and financial well-being. Therefore it is important to understand why you need to opt for credit monitoring services and regularly check your credit reports from the three major consumer credit bureaus; Experian, Equifax, and TransUnion.

Fraudulent activities and credit reporting errors are common and still happen despite emphasizing valid credit information. A study conducted by the Federal Trade Commission (FTC) found that 25% of consumers came across mistakes in their credit reports, which could have an adverse effect on their scores.

Consequently, there are several ways to frequently monitor your credit report to identify any fraudulent activity or negative entries. There is a choice of a DIY approach or subscribing to credit monitoring services to assist you better. You must decide if paid credit monitoring services are worth the fees. Read further to decide if the advantages of paid credit monitoring outweigh the charges.

Basics of Credit Monitoring

Credit monitoring resources assist you with tracking your credit reports to identify errors in order to make important changes. Adjustments to your credit score may also be tracked, depending on the service you opt for. The credit monitoring service will alert you via email in case of any change in any of your reports.

For instance, if a creditor wants to access your credit report as part of a new financing application process, most services will inform you of your report’s hard credit inquiry. Other changes that are tracked include:

• An increase or decrease in your credit score
• New lines of credit
• Delayed or missed payments
• Changes to the credit utilization rate or available credit card balances
• Recent derogatory information in your credit report
• Updates to your personal information (name, social security number, etc.)

Limitations of Credit Monitoring & Other Useful Credit Protection Tools

Credit monitoring has several benefits, but it also has a few drawbacks. You may be alerted about new lines of credit in your credit report, and if you didn’t apply for a new account, the alert could help you identify a case of fraud. 

Credit monitoring does not save you from fraud or identity theft; it merely depicts that there’s suspicious activity on your credit report for you to take action towards. There are other measures that can be taken if you want to protect your credit and prevent identity theft or fraudulent activities from taking place.

• Add fraud alerts to your credit reports.
• Placing a credit freeze permits you to limit means of entry into sensitive data like your credit report to keep you protected from fraudulent activities and credit applications.
• Register with an identity theft protection company. A few credit monitoring services include this in their packages.

Free of cost Credit Monitoring

1. AnnualCreditReport.com

Regularly reviewing your credit report can help you identify errors, potential fraud, and suspicious activity. As per federal law, under the Fair Credit Reporting Act, your annual credit report can be obtained free of cost from each of the three major credit bureaus; Experian, Equifax, and TransUnion. 

These free reports can be claimed from AnnualCreditReport.com. However, these reports don’t come with a credit monitoring alert option, so you will not be alerted in case of a change in the information in one of your reports. 

2. Other Free Services

Numerous online companies offer free access to your credit report or free credit monitoring services. There is, however, a downside to such services.

Credit monitoring resources receive a commission if you sign up for an advertised financial product in exchange for access to your credit details. Remember that these free credit monitoring providers do not give you access to your report from all three bureaus but only from one or two of the consumer credit bureaus. At times, only a credit report summary will be made available to you instead of a complete copy of your consumer credit disclosure. 

3. Free Credit Monitoring via Your Credit Card Issuer

Some credit card lenders offer free credit monitoring as an after-sales service to cardholders as well as non-cardholders. 

4. Free Credit Monitoring from Data Breaches

You may be eligible for free credit reporting and monitoring services from the credit bureaus if you’ve been a data breach victim.

Paid Credit Monitoring

Paid credit monitoring comes with more benefits and perks as compared to what free credit monitoring resources have to offer. With these services, you can keep track of all of your three credit scores and reports via one account. Fee-based services additionally cover identity theft and provide protection against fraud. 

Popular Fee-Based Credit Monitoring Services

It is advisable to shop around to find the best deal for credit monitoring services before settling and paying for one. Different service providers have different rates and perks.

Listed below are some of the most recognized credit monitoring resources available online:

Bureau	Cost	Number of Credit Reports	Number of Credit Scores
Experian	• $4.99 in the initial month• $24.99 every month after the first	Three- Updated every month	Three- Updated every month
TransUnion	$24.95 monthly	One *Receive an alert via email when important information changes on any of your three reports	One VantageScore based on the report provided by TransUnion
Equifax	$19.95 monthly	Three – Annually updated	Three – Annually updated
myFICO	$29.95 per month	Three – Quarterly updated	28 FICO Scores
LifeLock	$9.99 – $29.99 monthly	0 – 3 Plan based annual reports and scores	0 – 3 Plan based annual reports and scores

Is it worth paying for Credit Monitoring Services?

Every individual should regularly check their credit reports to identify any errors or mistakes, which should be reported to the consumer credit bureaus right away. Whether you opt for a DIY approach to review your reports or pay for credit monitoring services is your personal decision. It is up to you to decide whether or not paying for these services is worth the cost.