If you can afford to have someone impersonate you and gain access to your financial records and rack up debt in your name then skip this article. If not, read on.
There’s ‘protection’ services offered for nearly every possible mishap that can happen in life – life insurance to cover injury or death, extended warranties for big ticket purchases, homeowners and auto loan insurance to cover accidents, etc. Each of these services essentially saves consumers money by covering emergency expenses that might otherwise come from their personal savings or other resources. But if a covered situation never arises, the money invested will never be a benefit.
Some protections are worth opting for because of the obvious benefits and the sense of security and peace of mind they provide. But what about credit monitoring, is the cost worth it? Are there other options?
What Is Credit Monitoring?
Credit monitoring is a service that provides a firewall between your financial portfolio and the crooks that are out to steal what
belongs to you. By closely tracking changes to your credit report, identity theft or a security breach can be spotted early. While it’s true that every consumer has the legal right to view their credit reports once each year for free, those same reports typically change every month on average, potentially giving a less than accurate impression of the current condition of your score, an important consideration when you plan to apply for a large loan or mortgage. The right time to apply is when your score is at its highest, potentially saving hundreds and even thousands of dollars over the course of a long term loan or mortgage.
What Credit Monitoring Is Not
Credit monitoring does NOT prevent identity theft. It can help lessen the damage of an occurrence by alerting you to potential threats that appear on your reports.
Is It Worth It?
When you consider the total cost and what you get for your money, there’s no better deal offering identity protection. Credit monitoring services start at $180 per year, compared against the cost of multiple orders of your credit scores from the three main reporting agencies over the course of a year makes it cost-effective. The average cost of a single copy of your report from any of the three agencies is $12; multiplied by three separate reports for a monthly cost of $36 – more than a whopping $430 annually.
By frequently reviewing your credit reports, you stand a better chance of spotting fraudulent entries that may indicate identity theft, such as unusual activity, new accounts you never authorized or jumps in credit account balances. There is no risk to your credit score no matter how many inquiries you make to see your personal records, as the credit reporting bureaus consider these reviews soft inquiries and not applications for credit. If you are checking your report frequently, then you’re able to fix the issue quickly rather than wait months before you find out when more damage to your score has been done.
What to Look For
Each of the major reporting agencies provides its own credit monitoring, but only for their specific reports. They don’t necessarily correlate with other agencies to prevent fraudulent instances from slipping through. If you choose to go with a monitoring provider, make sure they are watching all the major reporting agencies. Having a single company watching all three reports will have the advantage of making sure the reports are in sync, increasing your protection. When researching credit monitoring services look for companies that provide additional services beyond just monitoring reports. Many of the good companies will provide identity theft insurance and free access to your credit scores without any additional cost.
When compared to diligently monitoring credit reports on your own, paying a service to do the work is much more cost efficient. In my opinion, once you add the additional services to the monitoring, you definitely get your moneys worth. As with any service being considered, make sure you do your homework and thoroughly research the specific company and the service contract presented to you. Be sure you know what it takes to cancel the service, if you change your mind down the road.
About The Author: Noreen Ruth writes for ASAP credit card blog and several popular finance websites. She is interested in educating consumers about using credit responsibly and about legislative action that will affect their ability to borrow the money they need. She has contributed hundreds of articles to various online sites that provide content to educate consumers on comparing credit cards, debt relief services, loans and other finance related topics.