Table of Contents
- Credit monitoring is the act of checking your credit reports for any signs of fraud or suspicious activity, and it’s important for protecting yourself financially
- Paid monitoring services alert you to a range of red flags such as new credit accounts, address updates, credit inquiries, and more
- If you’ve recently had your personal information exposed or been a victim of identity theft, it may be a good idea to pay for credit monitoring
- In most cases, you can keep track of your credit through free credit reports and free monitoring services
Paid credit monitoring services allow you to track credit activity across all your credit reports and watch for any signs of fraud and identity theft. Although they’re helpful for some consumers, most people will find that free monitoring services suit their needs.
In most cases, deciding if paid monitoring is worth it will come down to whether your personal information is substantially at risk. Whichever option you choose, monitoring your credit is an important part of protecting yourself financially.
What Is Credit Monitoring?
Credit monitoring is a broad term for any activity that involves tracking your credit reports and any account activity reported to the three credit bureaus — Equifax, Experian, and TransUnion. You can do this yourself by accessing free annual copies of your credit reports, or you can use a credit monitoring service.
With a credit monitoring service, you’ll get alerts about any changes to key information in your credit report. Each monitoring service tracks different details, and some only track one specific bureau, but they’ll typically monitor details like new accounts, credit checks, updates to your personal information, or finding key details like your Social Security number on the dark web. These services cannot stop thieves from accessing your personal information, nor can they remove negative marks from your credit report.
Paid monitoring services track more details and offer more features than free services, and they can cost anywhere from $5 to $40 a month. To determine whether a paid service is worth it, it’s important to compare the features you get and decide if they’re more valuable than a free or less expensive option.
Credit monitoring is an important component of financial vigilance. While paid services offer comprehensive monitoring and convenience, assessing your individual risk level and needs is essential. Self-monitoring and free options can be effective, especially when combined with regular reviews of your credit reports. The choice between paid and free services depends on your personal circumstances, such as your history of identity theft or exposure to data breaches.
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Reasons To Consider Paid Credit Monitoring
To understand the value of paid credit monitoring, you’ll need to assess your concerns about the possibility of fraud and identity theft. Paid services are appropriate for some people, as they offer three key benefits.
Early Detection
Credit monitoring services alert you to changes in your credit report quickly so that you can take action. This can help you prevent fraud and identity theft, saving you significant headaches and possible financial loss.
For instance, say a new address shows up on your credit report, and it’s not one you’ve ever been associated with. Credit monitoring could quickly alert you to this early sign of identity theft so you can freeze your credit and investigate the issue.
Convenience
Many paid services monitor all three major credit bureaus so you can get all your information in one place rather than requesting reports from each bureau individually. They also frequently offer extra security features like identity theft insurance, lost wallet protection, dark web monitoring, and more.
For some consumers, this extra peace of mind will be well worth the monthly cost of monitoring.
Protecting High-Risk Individuals
Credit monitoring is especially valuable for anyone who’s already had their identity or personal information compromised. For instance, if you know your credit card information has been exposed in a data breach, it may be worth paying for credit monitoring for at least a short period to make sure you’re on top of any changes. Instances of such breaches have risen sharply recently, leaving more consumers at risk.
Again, it’s worth emphasizing that these services will not stop identity theft or exposure of your personal information. However, they can help you act quickly if a thief attempts to use this information to open new accounts in your name.
Paid credit monitoring services can be particularly valuable for individuals with a high risk of identity theft or those who have already experienced it. The convenience and breadth of monitoring they offer, including tracking across all major credit bureaus, can provide peace of mind. However, it’s important to weigh the cost against the benefits and consider if the additional features, like identity theft insurance and dark web monitoring, justify the expense.
Alternatives To Paying For Credit Monitoring
Paid services offer advanced features and in-depth monitoring, but they’re not the only option for keeping up with your credit history.
Free Monitoring Alternatives
Many consumers are eligible for free credit monitoring, especially following high-profile data breaches. The companies responsible for the breach may offer free monitoring for a year or more, and this may be sufficient to protect you while you’re most at risk.
Many personal finance websites, banks, and credit card companies also offer free credit monitoring services that update regularly. You can use these to check your credit score and review the most important information on your credit report.
Self-Monitoring
It’s possible to perform most of the functions of credit monitoring services yourself. For instance, U.S. federal law entitles you to a free annual report from each major credit bureau, and you can request them online at AnnualCreditReport.com.
Between free reports and free monitoring services, all it takes is a small investment of your time to monitor your own credit without spending a dime.
Credit Freezes
Even if your personal information was exposed, that doesn’t mean you have to rely on paid monitoring. You can also freeze your credit to prevent unauthorized activity — and thaw it when you need to apply for a loan or credit card.
Freezing your credit is often considered the strongest protection against fraud or identity theft. The credit bureaus are legally required to offer this service for free, and you can do it as often as you want. It doesn’t prevent you from accessing your own credit reports, either.
While paid credit monitoring services offer extensive coverage, free alternatives and self-monitoring can be equally effective for many individuals. Regularly accessing free credit reports, utilizing free monitoring tools provided by financial institutions, and considering credit freezes are proactive steps to safeguard your credit. The key is to remain vigilant and proactive, whether you choose a paid service or a free alternative.
Is Paid Credit Monitoring Worth It?
In short, paid credit monitoring services are worth it for some people, but most can get by with free monitoring. If you are a recent victim of identity theft or another type of data breach, paid monitoring may provide an extra layer of security and peace of mind. Plus, if you simply don’t have the time to keep up with credit monitoring on your own, a paid option can offer a wealth of detail without the hassle of remembering to check in regularly.
Frequently Asked Questions (FAQs)
Should I Monitor My Credit?
It’s always a good idea to monitor your credit for signs of fraud and identity theft, as this can help you prevent significant financial loss and other problems accessing new credit. It also helps you find and correct errors, which may improve your credit score.
Is Credit Monitoring Effective?
Credit monitoring is effective at alerting you to red flags on your credit report, and some paid services even offer insurance if you experience financial loss due to identity theft. However, these services will not prevent fraud. Ultimately, they’re only as good as your ability to follow up quickly if you receive an alert.
Will Credit Monitoring Hurt My Credit Score?
Credit monitoring does not hurt your credit scores. Any inquiries that appear will be classified as “soft inquiries,” which have no impact on your scores.
How Can I Monitor My Credit Report For Free?
You can order one free copy of your credit report from each bureau every year at AnnualCreditReport.com. Many free credit monitoring apps also allow you to track important activity on your credit file, even if you can’t view your full report.
Find out more
- What is Credit Monitoring? – Learn how credit monitoring can safeguard your financial well-being.
- What is Credit Repair? – An introduction to the fundamentals of credit repair.
- What is the Lowest Credit Score? – Understand the implications of having the lowest possible credit score.
- Understanding Credit Repair Cost – Navigate the financial aspects of credit repair services.
- Removing Old Names and Addresses from Credit Report – How to ensure your credit report is current and accurate.
- Soft vs Hard Credit Checks: What You Need to Know – Clarifying the effects of different types of credit inquiries.
- Tips for Comparing Credit Repair Companies – Guidance on how to choose the best credit repair company for your situation.
- What Affects Credit Score? – Identify and understand the factors that impact your credit score.
