If you’re someone worried about the well-being of your credit score, this might also be an interesting read! We’ll explain everything about credit monitoring services, including how they work, how to choose them and if they’re the right choice for you.
What are credit monitoring services?
Credit monitoring services have the objective of avoiding or alerting an individual to potential fraud or any other practices that affect their credit score. They also allow consumers to identify credit reports errors and mistakes early, avoiding the damage that they could do to their financial lives.
Believe us, reporting agencies and credit companies also make mistakes when sharing your information! This means that even someone who was never a victim of identity theft might notice things that aren’t supposed to be in their report.
We’ll give you a quick example of the action these services allow. Let’s say our friend Joe got mugged and lost all of his credit cards. The credit monitoring service he uses will alert him once it notices the different buying patterns on these cards. It means he can cancel them early and call his credit company to inform those purchases weren’t his.
How do credit monitoring services work?
Most credit monitoring services track your credit report (or as many of them as you want) and watch for changes. As soon as that change happens, you’ll get an e-mail informing you about it so you can take action fast. Some services also inform you when your score suffers some damage.
They can give you alerts even when lenders access your report, since it creates a hard inquiry that will be registered. Other information that these services track include:
- Opening of new accounts;
- Changes in credit utilization rate;
- Late payments;
- Changes on your personal information, such as name, address and social security number.
Basic credit monitoring services
There are two types of credit monitoring services: basic and premium. Let’s start with the first one, basic. It’s often free to use, so you don’t have to give a credit card number as soon as you sign up. Of course it has its limitations, especially considering this is a free service usually provided by a reporting agency.
Most of the times, a basic service only allows you to collect data from one source. This means that you can choose either Equifax, Transunion or Experian, but not all of them at once.
After hiring a basic credit monitoring be aware that you’re not getting any insurance! Because of that, even if you’re able to identify fraud or identity theft early, you’ll suffer with the losses. There won’t be an insurance that helps you retrieve what’s already been lost, you’ll just be able to stop it early.
Premium credit monitoring services
On the other hand we have premium credit monitoring services. After a quick search on the web you’ll see that there are dozens of options of paid services around. Some of them are even sold by reporting bureaus.
There are two main differences you must take into account when deciding for this service. Firstly, they allow you to track all three major reporting bureaus, making it easier to keep track of possible fraud or problems on your report.
Secondly, a good chunk of premium services are already sold with insurance. Some of them offer up to US$1 million to cover identity theft and fraud damages.
Why do you need credit monitoring services?
Keeping credit monitoring services active are a good way of avoiding common problems with a credit score report. If we only consider numbers related to credit cards, the amount of fraud is incredible! When the subject is identity theft, statistics show that more than 650 thousand Americans suffered from such scams in 2019.
Each time someone becomes a victim of fraud a lot of headaches and losses ensue. Victims who reported financial losses lose about US$7.000 each time. Meanwhile, some victims reported up to US$700 in indirect losses.
Remember that financial problems aren’t the only thing you must worry about. Some data remains for years on your credit report and could be in the way of loans, mortgage deals and even new insurance.
Best free credit monitoring services
Since we talked about free credit monitoring services, we bought a couple of choices that are quite popular right now. These are excellent ways to begin protecting your credit score, but if you’ve already been a victim of fraud or identity theft we strongly recommend premium alternatives.
1. Credit Wise
Since this is a free service, you don’t need a credit card to start, or even a Credit One card or account for that matter. This means that anyone can use this service, making it a good place for starters.
There is a Credit Wise app so that you can keep track of your score and alerts easily on your phone. Those who already have Credit One accounts can access this information in their bank app, meaning you don’t have to download the monitoring app as well.
The services include weekly TransUnion records, as well as Experian records in real time. There is also the possibility of using a dark web scanner and social security number tracking, keeping you alert for identity theft.
2. Experian
Experian has a credit monitoring service of its own, it offers some of the advantages available for premium users, such as:
- Real time alerts about credit inquiries;
- Changes to personal info;
- Suspicious activity to your credit report;
- One time dark web report on sign-up.
We suggest you use the free Experian service as a tryout period to find out if you actually need this type of monitoring. If it’s something that interests you, there is a choice to upgrade to their paid services, which are much more thorough and complete.
Paid assets from premium credit monitoring services
Anyone looking for a more complete protection should look for paid credit monitoring services. We separated a few of the assets that these companies might offer you, but it’s important to research and compare before you start paying for anything.
1. Identity theft protection
Everyone must be worried about identity theft, so premium services will continuously scan the dark web for signs of new online accounts. If your personal information is compromised you’ll get an alert so you can give the heads up to creditors and banks.
Some services also have password management features to help you avoid hacker attacks.
2. Financial fraud protection
Suspicious activity on your credit report is often a sign of fraud. If someone requests a new credit card or loan on your name. There is also the possibility of locking your reports, making it impossible to generate new inquiries.
3. Device and network protection
Keeping your devices protected is an important step to defend your private information from hackers. Many services also offer malware and virus protection for both your personal devices, such as smartphones, or work networks.
4. Family protection
Some plans also offer the chance to keep alerts for everyone in the family. Even children might have their information compromised and used, so it’s important to keep watch.
You should pay for credit monitoring services if…
We know there are a lot of advantages to credit monitoring services, but don’t get one unless it’s absolutely necessary. Remember that the first step to keeping great financial health is by only having costs you need.
If you don’t use credit services often, keeping track of your spending and activities should be easy on your own. However, people whose accounts get a lot of movement might need some extra help for that.
Cases of people that are already victims of identity theft or fraud might need the protection of such services. Anyone with a high risk of theft, such as those affected by social media or bank data breaches, should consider this option as well.
How to choose credit monitoring services
When looking for credit monitoring services the first options you find are the ones from the reporting bureaus themselves. We recommend you keep looking a bit further for better, more advantageous. They don’t usually offer coverage for identity theft, which is a must in most cases.
You must pay close attention to each services’ limitations to decide what is the ideal one for each case. It’s important to check if they monitor credit reports from all three bureaus or just one or two of them.
Another important tip: check if your credit provider already offers free access to credit reports. Sometimes, you already have access to monitoring services because of your credit card or bank account without even knowing!
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