What is credit monitoring?
Credit monitoring is a service that tracks ongoing activity related to your credit report and alerts you of any significant changes or potential fraudulent activity. The monitoring process involves regularly reviewing information from one or more of the three major credit bureaus: Equifax, Experian, and TransUnion.
Credit monitoring services help keep track of credit health, protecting you from identity theft, fraud, and errors on credit reports. In addition to helping you catch and stop fraudulent activity, credit monitoring can also be a proactive way to help boost your credit score, improving your access to the best credit options available.
How does credit monitoring work?
When you hire a credit monitoring company, the company conducts an initial review of your credit. It then regularly checks your credit file to detect and alert you to changes or potentially fraudulent activity. Services may track your credit reports through a combination of the three main credit bureaus.
By keeping a constant watch over your credit reports, credit monitoring services can alert you to any changes or suspicious activity. For example, a credit monitoring service will typically send you alerts when there are significant changes to your credit file, such as new credit inquiries, new accounts opened in your name, changes to your payment history, or changes to your credit score.
With credit monitoring, you can stay on top of your credit health and be on the lookout for any potential issues that may arise. It’s an effective way to protect yourself financially and ensure your credit score remains strong. And, as time passes – with your score trending higher – you can gain access to more loan options and higher credit limits, should you need them.
Who is credit monitoring for?
Credit monitoring is a valuable tool designed to help individuals who have a lot of financial activity, are trying to build or rebuild their credit, or are concerned about identity theft. By keeping a close eye on their credit report, individuals can identify errors or fraudulent activity quickly and take steps to address any issues before they become bigger problems.
While credit monitoring may not be necessary for everyone, it is an effective tool for anyone who wants to stay informed about their financial health and protect themselves from potential threats.
Consider a credit monitoring service if you:
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Don’t get credit monitoring through your bank: If you don’t already get credit monitoring through your bank, then a dedicated third-party service might be worth considering.
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Have been the victim of identity theft: If you have been the victim of identity theft, a credit monitoring service can help you monitor your credit report for signs of further fraud.
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Want to keep an eye on changes to your credit score and report: Whether you’re trying to build up or maintain good credit, staying informed about any changes that could affect your score is essential. A credit monitoring service can help you stay on top of any changes to your credit report.
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Have a lot of financial activity: If you have multiple loans, accounts, or frequent applications for new credit, it’s important to keep an eye on your credit report and score to prevent potential fraud or errors.
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Have lost credit cards or had them stolen: If your credit cards were lost or stolen, a credit monitoring service can help you keep track of any suspicious activity on your accounts.
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Have had personal data compromised in a data breach: If your personal data has been compromised in a data breach, a credit monitoring service can help you keep an eye out for any suspicious activity.
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Struggle to monitor credit by yourself: If you are new to credit or find it difficult to keep track of your credit report and score, then a credit monitoring service can help you stay on top of any changes.
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Want to improve your credit: Credit monitoring is a great way to stay informed of changes to your credit report that could impact your credit scores, such as late payments or new inquiries. By monitoring your credit, you can quickly identify any potential issues dragging down your score and take steps to correct them.
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Recently moved or opened up new accounts: If you recently moved or opened new accounts, credit monitoring can help you detect fraud if someone gains access to your accounts.
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Someone is attempting to open fraudulent accounts with your information: If someone is attempting to open fraudulent accounts using your information, a credit monitoring service can help you quickly identify any suspicious activity and protect yourself.
Lastly, if you’re applying for a loan or credit card – especially to finance a big purchase, like buying a home – it’s important to stay informed about any changes that could affect your score and your loan underwriting. A credit monitoring service can help you do this by tracking changes to your credit report and alerting you of any potential issues.
If you fit any of the criteria above or simply want to use a credit monitoring tool to stay on top of your credit, take time to research different options before deciding which to use. By understanding the features offered by different providers, you can make sure you are getting the best protection for your credit profile and financial health.
Credit monitoring vs. identity theft protection
Credit monitoring and identity theft protection are two important services that can help keep your financial information safe from fraud or misuse. While they both provide similar benefits, there are some differences between the two services.
Credit monitoring focuses on tracking changes to your credit reports, such as new inquiries, accounts opened in your name, changes to payment history, or when your credit score has changed. The service also helps you catch any suspicious activity and alert you to protect your financial identity.
Identity theft protection goes beyond credit monitoring and is designed to safeguard not only your credit information but also your personal information, such as bank accounts, Social Security number, and driver’s license number. This type of service usually provides fraud resolution assistance, along with comprehensive monitoring and alerts.
Credit monitoring is best if you don’t get credit monitoring from your bank, have been the victim of identity theft or credit card theft in the past, struggle to monitor your credit yourself, or want to improve your credit. Identity theft protection may be better if you want more comprehensive protection for your personal information, including credit monitoring, alerts, and fraud resolution.
How to monitor your credit
Monitoring your credit is essential to protecting yourself from identity theft and other financial threats. By keeping a close eye on your financial information, you can take the necessary steps to address any issues before they become more significant problems.
Here are some of the most common ways to monitor your credit:
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Through your bank: Many banks offer credit monitoring services for their customers – often free of charge. These services typically track your credit report and alert you to any changes or suspicious activity.
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Through a free service: Several online services, such as Credit Karma and Credit Sesame, offer free credit monitoring. These services can help you keep tabs on your credit score and notify you of any changes in your report.
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Through a paid service: You can also sign up for a third-party credit monitoring service that will regularly check your credit reports from the three major bureaus (Equifax, Experian, and TransUnion). These services are typically offered on a subscription basis, and many offer free trials.
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DIY: If you don’t feel comfortable signing up for a third-party service, you can monitor your own credit by checking your reports yourself. Each year, you’re entitled to one free copy of each of your credit reports from Equifax, Experian, and TransUnion. You can also check your credit score for free with some websites or leverage free trials and unenroll before you’re billed for monthly subscriptions.
It’s important to monitor your credit regularly so that you can catch any errors or fraudulent activity quickly and take steps to address them before they become bigger problems. If you struggle to monitor your credit yourself or if free options don’t offer sufficient features, paid credit monitoring is a great tool to help you stay on the lookout for potential fraud or identity theft.
How to choose a credit monitoring service
Credit monitoring is an essential tool for anyone looking to keep their financial information safe from fraudulent activity. It can also be helpful in improving your overall credit health and keeping up-to-date on any changes or potential errors on your credit reports. By researching and comparing the different services available, you can easily find a credit monitoring option that fits your budget and needs.
These are some factors to consider when choosing a credit monitoring service:
Cost
The cost of credit monitoring services can differ significantly depending on the provider and the level of coverage offered. Some offer a basic level of coverage at a lower cost, while others may provide more comprehensive protection at a higher price. Likewise, some credit monitoring companies charge a monthly subscription fee, while others offer a one-time payment option. Read the fine print and compare the costs of each service before making a decision.
Number of credit bureaus monitored
A good credit monitoring service should monitor all three major U.S. credit bureaus: Experian, Equifax, and TransUnion. The more comprehensive the coverage, the better prepared you will be for any potential issues on your report.
Alerts
Credit monitoring services can provide alerts when various changes occur on your credit reports or if there is suspicious activity related to your accounts. Pick a provider that offers timely alerts so you can quickly address any errors or fraudulent activity before it becomes a bigger problem.
Customer service
When you have a question or issue related to your credit monitoring service, you need to know that a provider representative is available to help. Check the customer service options offered by each provider and ensure there are reliable ways to contact them when needed.
Identity theft insurance
Many credit monitoring services also offer identity theft insurance. This type of coverage can help protect you if your identity is stolen and cover costs related to restoring your credit or legal expenses associated with the theft. Not all providers offer this, so make sure to review the policy before signing up for any service.
Dark web scanning capabilities
Dark web scans continuously monitor websites and databases on the dark web to identify if any of your personal information has been exposed or stolen. Look for providers that offer this type of protection, as it can be invaluable in helping you protect your information from identity thieves.
Pros and cons of using a paid credit monitoring company
Credit monitoring is an important tool to help keep your financial information safe from fraud and misuse, but choosing the right service can be challenging. Make sure you get the best protection for your money by familiarizing yourself with the pros and cons of using a paid credit monitoring company.
Credit monitoring company pros
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Comprehensive monitoring: Paid credit monitoring services typically offer comprehensive credit monitoring that covers all three of the major consumer reporting bureaus. It also offers proactive alerts to notify you of changes to your credit score and report.
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Increased security: With a paid service, all your important financial information is monitored 24/7. This means the monitoring service can notify you as soon as there are any significant changes or suspicious activities.
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Improved score tracking: A paid service allows for more efficient score tracking because they utilize up-to-date algorithms and data sources for their calculations. This can also help monitor suspicious activity faster than free services, which typically only update scores a few times per month.
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Identity theft protection: Most paid credit monitoring services also come with identity theft protection, offering added layers of security beyond just credit report alerting. This usually includes access to fraud resolution assistance in case any issue arises or fraudulent activity is detected on your account.
Credit monitoring company cons
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Cost: While many credit monitoring services offer free trials and inexpensive packages, some offerings can cost $40 per month or more. However, monthly fees and add-on charges vary depending on the provider and the services they offer, so evaluate all your options before signing up.
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Not available in all states: Many paid credit monitoring services are not available in certain states due to state regulations. Keep this in mind when shopping around.
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No score improvement guarantee: While paid credit monitoring services can help you track and monitor your credit, they cannot guarantee a score improvement as this will depend on other factors, such as responsible credit usage and payment history.
How to avoid credit monitoring scams
Credit monitoring scams are fraudulent schemes that target individuals trying to stay on top of their finances. These scams are usually promoted through unsolicited phone calls, emails, or text messages from scam artists who pose as representatives of legitimate credit monitoring companies. They may tell you your credit score is in danger of dropping and offer to monitor your credit for a fee.
These are common types of credit monitoring scams:
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Phishing scams: Phishing scams are fraudulent emails or text messages that appear to come from a legitimate company offering credit monitoring services and request sensitive information such as bank account numbers and passwords.
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Impersonating legitimate companies: Scammers often disguise themselves as representatives of reputable companies offering free credit monitoring in exchange for personal information.
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High-pressure tactics: Fraudsters may use aggressive tactics such as contacting you multiple times with threats of lowering your credit score if you don’t sign up for their service immediately.
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Upfront payment requests: Any company asking for payment upfront – especially over the phone – is most likely not legitimate. Protect your financial security by avoiding these fraudsters at all costs.
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Fake promises of score improvement: No legitimate company can guarantee an improvement in your credit score, so be wary of any promises made while trying to get you to sign up.
The dangers of these scams are numerous. Firstly, the information you provide to these scammers could be used to steal your identity and commit further financial crimes. Providing sensitive information such as your Social Security number or credit card details could expose you to financial losses or damage to your credit. It’s important to be aware of and avoid these scams by using only legitimate credit monitoring services and engaging them through their secure websites.
How We Rank Credit Monitoring Services
Credit monitoring is an essential part of improving your credit and with so many credit monitoring services on the market, your options are endless.
Although the final choice greatly depends on your personal financial situation, here are some guidelines to help you in your search:
Pricing
This one can be tricky since credit monitoring services range from minimal service with no cost or credit card obligation to a flat monthly fee. What you pick largely depends on two factors:
- How often you want to check your score. Some services only provide free credit monitoring from one credit bureau, a one-time credit score with a free/$1 refundable trial, or monthly credit monitoring for a flat fee.
- FICO or no? You may want your exact FICO score or you may be content with receiving a score based on a model similar to FICO.
- How often you want your score to be updated. Some services provide frequent credit monitoring, while others simply show your scores a la carte.
Here are a few services ranging from free to a flat fees:
- Credit Sesame: This free services offers Experian credit monitoring. You do not have to enter any of your credit card details for the service, although you can purchase additional services provided by other companies through Credit Sesame.
- PrivacyGuard: PrivacyGuard offers a $1 fee for a 14 day trial and $19.99/month for three bureau credit reports, daily credit monitoring, and monthly credit score tracking.
- FreeScore360: FreeScore360 charges you a $1 refundable fee for a 14 day free trial before automatically charging $39.95 once the trial period is over. However, they only provide monthly updates and non-FICO scores.
- Smart Credit: For $19.95/month, Smart Credit offers two monthly updates on your credit scores and 3 bureau credit score and reports a la carte.
Additional Benefits
Many companies have extra perks to supplement their credit monitoring services. If you are simply looking for a one time score or monthly monitoring, these services may not interest you, but if you are searching for something a little extra, here are some credible services:
- Credit Sesame offers identity theft insurance, a mobile app, tracking for financial progress, and financial goal setting.
- Depending on the plan, myFICO provides FICO Scores, Equifax credit monitoring, lost wallet protection, 24/7 full service identity restoration, and $1 million in identity theft insurance.
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Identity Guard offers lost wallet protection, $1 million identity theft insurance, $1 million reimbursement for stolen funds, social security monitoring, and child identity monitoring depending on the plan you purchase.
Time In Business
Your credit is a vital part of your life, so entrusting your finances to a tried and true service is important. Credit monitoring companies with over 10 years of time in the industry include Identity Guard (since 2001), PrivacyGuard (since 1973), and myFICO (since 2001).
Customer Service and Reviews
Checking reviews on customer service can help you determine how a credit monitoring company really treats their clients. The BBB, Yelp, Trustpilot, and Google reviews are good places to learn if a company:
- Provides solid customer service
- Updates you on any changes
- Can be contacted easily through phone, email, live chat, or an online portal 24/7
- Responds quickly to any questions or concerns you may have
Smart Credit, Identity Guard, and LifeLock all have generally positive reviews from real consumers.
Credit monitoring is a service that helps people keep track of their credit scores and overall financial health, protecting them from identity theft and fraud. The best credit monitoring companies offer a variety of cost-effective options to help users guard their financial security, plus numerous add-ons for customers to get the most out of their services.
Frequently Asked Questions
What is credit monitoring?
Credit monitoring tracks your credit history and notifies you of any changes (such as a new account or inquiries) to your credit report or credit scores.
Is credit monitoring important?
Absolutely. A good credit monitoring service can help prevent identity theft or notify you of any fraudulent activity before anything more serious occurs.
How much does credit monitoring cost?
This varies by company, but most credit monitoring services charge between $9.99/month to $39.95/month. Many services may also allow a 30 day free trial period to help you decide if you want to pursue credit monitoring.
What exactly can a credit monitoring service do?
Depending on the level of service, credit monitoring services can provide credit monitoring, dark web monitoring, fraud detection, identity theft assistance and insurance, near real-time alerts, online protection, risks assessment, and more.
Should you pay for credit monitoring?
If you don’t have serious concerns about your credit or have never been the victim of identity theft, free credit monitoring services may cover the basics, such as monthly alerts about changes to your credit report. Paid services are typically better if you’re looking for more comprehensive coverage or additional features such as improved score tracking, identity theft protection, and dark web scanning capabilities.
How much does credit monitoring cost?
The cost of credit monitoring varies depending on the service provider and the features included in the package. Generally, most basic services range from free to$20 per month, with advanced packages costing up to $40 per month or more. Some providers may offer discounts or additional features that make their service more or less appealing.
Is credit monitoring worth it?
Credit monitoring is worth it if you want to stay on top of your financial health and protect yourself from identity theft. With credit monitoring services, you will be instantly alerted to changes in your credit report and can take proactive steps to address any issues before they become serious problems. In addition, many paid credit monitoring services come with added layers of security, including access to fraud resolution assistance and dark web scans.
What are the different types of credit scores?
Lenders and financial institutions use a handful of different types of credit scores when evaluating prospective borrowers. The most commonly known credit score is the FICO Score, which ranges from 300 to 850 and is independently calculated by all three major credit bureaus (Experian, Equifax, and TransUnion). However, there are also alternative credit scores, such as the VantageScore, that use different scoring models and weightings to determine creditworthiness.
Does credit monitoring lower your credit score?
Credit monitoring does not lower your credit score. Instead, credit monitoring services are designed to monitor credit reports for any suspicious or unauthorized activities. This can include changes in credit utilization, new accounts opened, or any missed payments on existing accounts. By alerting individuals to potential fraud or errors on their credit report, credit monitoring services can actually help them maintain a healthy credit score.
In fact, being proactive and vigilant about monitoring one’s credit report can demonstrate responsible credit behavior, which can positively impact their credit score over time. Therefore, credit monitoring services can be an incredibly valuable tool for individuals looking to protect and maintain their credit scores.
Do credit monitoring services provide free credit scores?
Many credit monitoring services offer free credit scores as an added perk to their monitoring services. However, not all credit monitoring services provide free credit scores. Some services may provide a basic score for free but require payment for additional scores or more detailed credit information.
Additionally, it is important to note that the credit score provided by credit monitoring services may not necessarily be the same as the score lenders consider when making credit decisions. While credit monitoring services can provide useful information and alerts for potential fraud, there are limits to the insights that can be generated from this information and the ways it can be used.
Credit monitoring is a valuable tool to help you stay on top of your financial health and protect yourself from identity theft and other fraud. Whether free or paid, these services can provide insights into changes in your credit score and alert you to potential fraud or errors. However, it’s important to compare the different options available and understand what each service offers before signing up, as providers may have different features and costs associated with their services. Choosing a credit monitoring service that meets your needs can be key to maintaining a healthy credit score.
