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Who is Right for Credit Monitoring?

In this topic, we've explained credit monitoring and its alternatives. Here we look at a few cases where credit monitoring might be a good idea.

If you decide credit monitoring is for you, our detailed comparison chart of three credit bureaus' credit monitoring services can help find one that's right for you.

 

  • Need Constant Access to Your Credit Reports and Scores

    Free and low cost alternatives to credit monitoring only get you so far. Your FICO credit score is tough to get for free. A credit monitoring service offers anytime access to your credit report and even alerts you when something changes.

    Maybe you are coming out of debt and are gauging your progress by your credit score.

    Maybe you are cleaning up your credit report and want to watch those collection accounts drop off.

    Maybe you are worried about identity theft but consider the tougher security freeze too drastic.

    If you need access to your credit report and/or score once a month or more, credit monitoring is an economical way to buy them in bulk.

     

  • Someone Buys It for You

    When a company or government organization inadvertently reveals your personal information, including your Social Security number, often they will offer a year or two of free credit monitoring. Since you are not paying for it and you are at risk of identity theft, it is a good idea to accept their offer.

    This exact situation happened famously in a case involving ChoicePoint where, due to a fairly obvious security flaw in their web site, 145,000 people had their complete credit histories stolen. ChoicePoint offered a year of free credit monitoring and three free credit reports.

    Countrywide is offering its customers two years of free credit monitoring after one of its employees allegedly sold customer data on the Internet for 2.5 cents per person.

    In cases like these, you are at an elevated risk of identity theft. While it may be a small consolation, take the free monitoring offer and review your credit report. It will save you a great deal of hassle later if your financial data gets into the wrong hands.

     

  • Bad Case of Identity Theft

    If someone stole a single credit card and is running up charges, this is probably not enough to enroll in a credit monitoring service. Just cancel the card and pull your credit report (for free) a couple of times over the next few months for reassurance.

    On the other hand, if someone has your Social Security number and is opening new lines of credit in your name, you have a big problem. Even in this case, you have free and quite effective options to prevent further damage to your credit. But considering the time and expense you will need to spend to fix this problem, a year of credit monitoring may seem like small potatoes.

    Among your free options: You can place a fraud alert on your credit report. You should certainly put a security freeze on your reports if you live in a state where this is an option. You can also add a personal statement to your credit report stating that you have been a victim of identity theft. Also, depending on the state you live, you are likely to have fairly regular access to your credit report if you have been a victim of identity theft.

     

  • Free Trial

    Nearly all credit monitoring services offer a 30 day free trial during which credit reports and credit scores are free. It does take vigilance to avoid getting charged for your trial:

    • Expect a charge on your credit card if you fail to cancel before the trial period ends
    • Always cancel in person over the phone. Check your credit card statement the month after you cancel.
    • Beware of FreeCreditReport.com! This company has a reputation for "misplacing" your cancellation request. We heard this complaint often enough that we created a guide to ensuring this service stays canceled.

     

  • Extremely Wealthy

    If you are so rich that you would never miss $50 - $180 per year, your bookkeeper or accountant might find some value in having real-time updates to your credit report.

     

If you think credit monitoring is for you, see our comparison of credit monitoring services.

 

Originally Published:  Saturday, August 12, 2006, 5:00 PM PT

Last Updated:  Friday, July 15, 2011, 5:17 PM PT

Version 2

 


 

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Credit Monitoring: Prudent or Pointless?

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