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.
Types of Credit Monitoring Services
Credit monitoring services come in various forms, each with its own set of features and benefits. Some of the most common types of credit monitoring services include:
- Basic credit monitoring services: This type of service typically includes daily three bureau credit monitoring from Experian, TransUnion, and Equifax and alerts when changes are detected. Basic credit monitoring is a good choice if you want to keep a close eye on your credit reports and be alerted to any suspicious activity.
- Identity theft protection services: These services provide an added layer of protection by monitoring the dark web and other sources for your personal information, such as your social security number or credit card numbers. They also provide tools to help you recover from identity theft if you do become a victim.
- Credit score tracking: These services monitor your credit score and provide updates on changes and factors that affect it. It can be helpful for those who are looking to apply for credit or loan in the future.
- Fraud alert services: These services allow you to place alerts on your credit reports, which requires lenders and credit card issuers to take extra steps to verify your identity before extending credit or opening an account in your name. This can be especially useful if you suspect your information has been compromised or you have recently become a victim of identity theft.
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.
Experian offers credit monitoring and identity protection through its Protect My ID service.
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.
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.
LifeLock is a well-known company that provides several levels of identity protection.
Features to Look for in a Credit Monitoring Service
When comparing credit monitoring services, it’s important to consider the features that are most important to you. Here are some key features to look for:
- Daily credit monitoring: Daily monitoring of your credit reports is essential because it allows you to catch any suspicious activity or errors as soon as possible.
- Alerts for suspicious activity: Look for a service that sends alerts when suspicious activity is detected on your credit reports. This could include changes to your personal information, new accounts opened in your name, or a sudden drop in your credit score.
- Credit score tracking: Credit score tracking feature can be helpful if you’re trying to improve your credit score or if you intend to apply for credit or loan in the future. It allows you to monitor credit score changes and view the details of what’s affecting it.
- Identity theft protection: This can include tools and resources to help you recover if you become a victim of identity theft, such as credit freezes and fraud resolution assistance.
- Credit report access: It’s important to have access to your credit reports from all three major credit reporting bureaus so you can monitor them for errors or suspicious activity. This can also help to give you a broader overview of your credit standing.
- Ability to dispute errors: Look for a service that allows you to dispute errors on your credit report directly through the service. This can be a more convenient way to file disputes and monitor their status.
Having these features can greatly benefit you in keeping track of your credit report and credit score. They can also provide additional protection against identity theft and disputed errors that can occur. You should choose a service that meets your needs, by considering the features that are most relevant to you.
How to Choose a Credit Monitoring Service
Choosing a credit monitoring service can be a difficult task, as there are many options available, each with their own unique features and benefits. However, by considering a few key factors, you can find the right service for your needs.
- Credit reporting agencies: Different credit monitoring services may pull credit data from different credit reporting agencies. The three main credit reporting agencies in the United States are Equifax, Experian, and TransUnion. Make sure the service you choose monitors all three agencies, as they may have different information on file.
- Alerts: The best credit monitoring services offer alerts for certain activities, such as a change of address or a new credit inquiry. Be sure to look for a service that offers the alerts that are most important to you.
- Credit scores: Some credit monitoring services provide access to your credit score, while others do not. If you’re looking to keep track of your credit score, be sure to choose a service that provides this information.
- Cost: Credit monitoring plans can vary in price. Some are free, while others can be quite expensive. Make sure to choose a service that fits within your budget and offers the features that you need.
- Additional services: Many credit monitoring companies offer additional services, such as identity theft protection, credit report analysis, and identity theft insurance. Be sure to look into these options and see if they would be useful for your needs.
- Availability of dark web monitoring: Some credit monitoring services will scan the dark web for any sensitive information that is available. Make sure to check whether the service you are choosing provides dark web surveillance.
- User-Friendliness: Some credit monitoring services provide an easy to navigate interfaces and other services that can be difficult to use. Choose the one that is easy to navigate and easy to use to you.
- Mobile access: Consider if the service offers a mobile app that you can access with ease and if the mobile App is user-friendly and well-designed.
- Reviews: Look for reviews of the service to get a sense of what other users have experienced.
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 should 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
There are a variety of different credit monitoring services available, and they can generally be divided into two main categories: free services and paid services. Both types of service have their own pros and cons, so be sure to consider them carefully to determine which one is the best option for you.
Free Credit Monitoring Services
Free credit monitoring services typically provide you with basic information about your credit score and report. This includes your credit score, the number of open accounts you have, and your payment history.
Some pros of using a free credit monitoring service include that they are typically available to anyone, regardless of their credit history. They also provide a good way for you to keep an eye on your credit and make sure that everything is accurate and up-to-date.
However, free credit monitoring services also have some downsides. For example, the information they provide may be limited. Additionally, they may not always be updated frequently, and you may not be able to access your full credit report through these services.
Furthermore, these services usually don’t provide any form of protection or identity theft remedy, also they don’t give you specific advice on how to improve your credit score or spot errors or fraudulent activity.
Some of the best free credit monitoring services include Credit Karma, Credit Sesame, and Credit Wise from Capital One.
Paid Credit Monitoring Services
Paid credit monitoring services offer more detailed and extensive information about your credit. They also often include additional features and services, such as alerts when something changes on your credit report, or even identity protection and credit score improvement tools.
Some paid services also offer a credit score simulator. This can be a good way to understand what factors are affecting your credit score, and what you can do to improve it. 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.
However, paid credit monitoring plans typically cost between $10 and $40 a month. Additionally, they more information than you need, and you may have to wade through this data to find what you are looking for.
Credit Monitoring FAQs
How much is credit monitoring?
Credit monitoring service can vary in cost, some free and some paid. Paid services can cost anywhere from $10 to $40 a month. Be sure to compare prices and features of different credit monitoring services before you choose one.
Some of the free services which are in form of apps, comes with ads and other forms of monetization. Always read the terms and condition when signing up to a service and make sure you understand what you are paying for.
Is credit monitoring worth it?
Credit monitoring can be worth it as it can help you to keep track of your credit history and quickly identify any suspicious or fraudulent activity on your credit report. It can also alert you to changes in your credit score and help you make informed decisions about your finances.
Credit monitoring can provide peace of mind. However, keep in mind that it can’t prevent fraud from occurring, rather it can just help you detect it early and take action.
How can I avoid credit monitoring scams?
To avoid credit monitoring scams, be cautious when providing personal information, such as your Social Security number or credit card information, to any company. Only provide personal information to companies that you know and trust.
Be wary of unsolicited phone calls or emails claiming to offer free credit monitoring services. Legitimate credit monitoring services typically don’t offer services in unsolicited ways. Furthermore, research any company you are considering using for credit monitoring services, check online reviews and Better Business Bureau (BBB) rating.