According to data from the Federal Trade Commission (FTC), there were 5.7 million identity theft complaints in 2021. And a significant number of those complaints resulted in fraudulent credit card accounts and bogus charges.
A large-scale data breach like the Capital One breach that exposed 100 million customer records in 2019 is becoming increasingly common.
Why You Need a Credit Monitoring Service
Having a reliable credit monitoring service is essential for everyone who wants to be sure their financial information hasn’t been compromised.
However, not all credit monitoring services are created equally. And finding the right service that provides the protection and resources you need can prove challenging.
We’ll explain the benefits of credit monitoring if you’ve never used one before or aren’t sure where to start. We’ll show you how to protect yourself and what you should look for when choosing the best credit monitoring service for your situation.
Quick Overview: Top 3 Credit Monitoring Services
What is a credit monitoring service?
Credit monitoring services keep track of any changes in your credit reports from the three major credit bureaus: Experian, Equifax, and TransUnion.
It may keep track of suspicious activity on your credit reports, changes to your credit scores, or both. The types of activity that credit monitoring services may track include:
- New accounts
- Changes to your credit limits
- Large purchases on an account
- New activity on a dormant account
- Credit inquiries
- Missed payments
- Collection accounts
Some credit monitoring services will also provide you with a free credit report and assistance with managing identity theft so that you can correct any fraudulent activity as soon as possible to minimize losses.
Credit Monitoring Really Is a Necessity
In recent years, a staggering number of businesses have been hacked, making credit card fraud and identity theft a serious concern.
Your credit information may be stolen from legitimate business transactions. It can happen at any time, regardless of the precautions you take personally to keep your information safe.
Scammers can take your information and open an account in your name even if you don’t have a credit card. This can expose you to hundreds or even thousands of dollars in losses. All it takes is one data breach or other instance of your identity being stolen to ruin your credit for months or even years.
Without a dependable credit monitoring service, you may not realize your credit has been compromised until you are denied credit or start receiving bill collection notices—and by then, it’s too late.
Types of Credit Monitoring Services
Not all credit monitoring services provide the same features. Most of them can be broken into three types of monitoring and protection.
- Credit Report Monitoring – active monitoring of your credit reports for changes that might be linked to fraud.
- Identity Theft Protection – active monitoring of your social security number, credit card numbers, and bank account numbers.
- Comprehensive Credit Monitoring – a combination of credit report monitoring and identity theft protection.
Which credit monitoring service should I choose?
When evaluating credit monitoring services, it’s important to compare your needs to what each service offers.
If you’ve been the victim of identity theft, consider this checklist of recommended steps you should take to protect your credit:
- Call the companies where the fraud occurred.
- Place a fraud alert on your credit report.
- Get a copy of your credit report to look for other problems.
- Monthly access to your credit score.
- Report the fraud to the FTC and the police.
- Close any credit card accounts opened in your name.
- Cancel any other types of account fraudulently opened in your name.
- Dispute charges through your credit card company.
- Dispute any negative accounts on your credit report caused by the fraud.
Would you feel comfortable handling these tasks (and more) on your own? If so, you can probably get by with a credit monitoring service that alerts you of any changes in your credit reports without any extra support.
However, a more complete credit monitoring service makes sense if you want to monitor for things like your personal or financial information appearing online on well-known financial black markets.
5 Best Credit Monitoring Services
When it comes to the best credit monitoring services, there are several options on the market:
Identity Guard® offers several tiers. At the high end, their Platinum service monitors all three credit bureaus for suspicious activity that may indicate fraud.
It keeps track of your public information and alerts you if changes are spotted, and provides monthly updates to the three credit scores they provide. This is in addition to other services such as identity theft assistance, and social security number monitoring.
The Essentials version does not keep track of your credit scores or changes to your credit reports.
However, it is useful for monitoring your credit information and receiving alerts if it is found on one of the numerous websites where scammers are known to buy and sell information.
They will help you with completing the many steps you need to take to protect yourself if your identity is stolen. Also standard across all plans is their $1 million identity theft insurance designed to help you minimize losses if your information is compromised.
Experian offers credit monitoring and identity protection through its Protect My ID service.
It’s more basic than what’s offered through some of the others as there is no option to track your credit scores. However, you will have access to credit monitoring alerts from both TransUnion and Equifax as well.
Experian keeps track of:
- Credit report changes
- Unauthorized use of your social security number, debit, or credit cards
- Any unauthorized change of address
In addition, you can get assistance with fraud resolution in case your identity is stolen, or there are unauthorized charges on your accounts. As with the other options we’ve covered, it comes with $1 million in identity theft insurance to minimize the risk of losses. The mobile app allows you to can access your account at any time.
IdentityIQ strives to provide consistent and affordable credit-monitoring services for its customers. Founded in 2009, the company offers comprehensive identity and credit reporting services as well as online educational resources.
You can choose between four tiered plans, which range in price from $6.99 to $29.00 per month.
IdentityIQ will work with the credit bureaus to closely monitor any changes on your credit report. You’ll receive daily alerts, monthly updates on your credit scores, and information about how certain actions can affect your credit. And IdentityIQ will let you know if there are any changes to your personal information.
One of the attractive things about signing up for credit monitoring with MyFICO is that they use the same credit scoring algorithm that lenders see.
They offer two different levels of service.
The first is called FICO Essentials 1B. You’ll get monthly access to one credit report and one credit score, both of which are based on your Equifax credit report. You get instant access to your account, can monitor changes, and even track your credit history.
As an added bonus, you’ll receive help in restoring your identity should any of your personal information be stolen. This package costs $19.95 per month, or you can save by prepaying a year for $219.
Alternatively, you can elect for the FICO Ultimate 3B plan, which allows you to check your credit report and FICO scores from all three bureaus. However, you only get updates every quarter, so you won’t see changes as they occur.
On the other hand, you do get intelligent identity monitoring, which is a great feature to use. This plan is available for $29.95 per month or $329 for the year.
LifeLock is a well-known company that provides several levels of identity protection.
Their standard service provides monitoring of that dark web to notify you if your personal information has been compromised.
One unique offering of LifeLock is their pre-approved credit offer reduction service. This can be useful for people who don’t want to constantly be bombarded with offers for new credit cards and lines of credit through the mail.
All LifeLock plans offer 24/7 support and assistance with identity theft issues. With the mobile app, their patented identity alert System will send alerts directly to your mobile device.
How do credit monitoring services protect me?
Credit monitoring services work by keeping track of your credit reports at the three credit bureaus. If there are changes found, you will be alerted through email or a text message. Once notified, you can take several actions:
- For new, unauthorized accounts you can contact the credit issuer and get the account shut down.
- If you have unauthorized charges on existing accounts, you can file a dispute.
- If some information on your credit profile is inaccurate, you can request corrections.
It’s crucial to make sure that your information is being reported correctly. This is especially the case when it comes to credit card limits because credit card issuers may raise or lower your limit without warning. When this happens, the only way to stay on top of your credit scores is to monitor your credit for such changes.
What do I do if they find a problem?
Once you have credit monitoring in place, it may be tempting to “set it and forget it.” However, that’s not the most effective way to keep yourself protected. Be sure that the emails and text alerts aren’t sent to spam or blocked.
If you do have your accounts compromised, the faster you are able to respond, the better your outcome will be. When you receive an alert:
- Respond promptly – contact your credit monitoring service and find out which steps they can handle for you.
- Provide information quickly – if you have a support team in place to fill out paperwork on your behalf, make sure they have the information needed.
- Follow-up regularly – make sure everything is handled in a timely fashion to avoid being liable for debts and fraudulent charges.
With the right credit monitoring in place, you can prevent huge financial losses and keep your credit safe from scammers, thieves, and fraud.
How else can I protect my credit?
Another service to consider using to help protect yourself from identity theft is a credit freeze. This service is now free to use with all three major credit bureaus.
What does a credit freeze entail?
It denies most creditors from accessing your credit report, including analyzing credit applications. Anyone who tries to open a credit card or other account under your name will likely be denied because the creditor couldn’t verify your credit history.
When you want to apply for credit on your own, you can lift the freeze either temporarily or permanently.
Free vs. Paid Credit Monitoring Services
According to Javelin’s Identity Fraud Study, 49 million people suffered losses from identity fraud in 2020. While this number is frightening, the good news is there are credit monitoring services available to help prevent identity fraud.
The best options present an opportunity to protect your financial information from landing in the wrong hands. However, it can be tough to know when to choose a free vs. paid credit monitoring service.
Free Credit Monitoring Services
As the name suggests, free credit monitoring services are available at no cost, making them a viable option for people on a budget. However, these options come with some limitations.
For example, the number of credit reports you can access at a time varies from one provider to another.
You may only be able to access one or two credit reports from the three main credit bureaus. Also, some providers guarantee free identity theft insurance. Again, however, this insurance is often limited, and you may still be exposed to threats.
There are two ways to access free credit monitoring services. First, the Fair and Accurate Credit Transactions Act allows the public to access credit reports from the three main credit bureaus once a year. Visit AnnualCreditReport.com to claim your reports. The only downside to this option is that it doesn’t offer free alert features when there’s a potential issue.
The other alternative is reaching out to internet-based lenders that provide free credit monitoring services. However, this option can be risky because these companies are likely to sell your information or advertise to you other financial offers.
Paid Credit Monitoring Services
Paid credit monitoring services can be the right option when you aren’t ready to expose yourself to more risks or unwanted solicitation. Though these options may cost between $10 and $30 a month, they’re a guaranteed way to protect your financial information from landing in the wrong hands.
Additionally, paid options allow you to access all reports from the three credit bureaus simultaneously and hassle-free. Furthermore, you’ll generally have access to identity theft insurance amounting to up to $1 million.
If there are no budget constraints, you should strongly consider paid credit monitoring services.