Despite the importance of valid credit information, fraud and credit reporting mistakes still happen. In fact, these issues are rather common. A study by the Federal Trade Commission revealed that 25% of consumers identified errors in their credit reports which could potentially impact their credit scores. Know here about credit monitoring: is it worth paying for? or not? hope your all confusion will gone.
On the bright side, there are multiple ways to monitor your credit reports for fraud and errors with aggressive credit repair. You have the choice of creating a free, do-it-yourself approach or paying for a credit monitoring service to help you. If you’re considering a paid credit monitoring service, you will need to decide if it’s worth the cost. Here is what you need to know to decide if the benefits of fee-based credit monitoring outweigh the fees.
Credit Monitoring Basics
Credit monitoring is a service that tracks your credit report (or multiple credit reports) for key changes. Depending on the service, it may track adjustments to your credit score as well. When a change takes place on one of your credit reports, your monitoring service will generally send you an email to alert you.
For example, if a lender accesses your credit report as part of a new financing application, most credit monitoring services would let you know about the new hard credit inquiry on your credit file. Other changes that a credit monitoring service might track include:
Credit Score Increases or Decreases
Adjustments to Credit Card Balances or Credit Utilization Rate
New Derogatory Credit Information
Updates to Your Personal Identifying Information (Name, Address, etc.)
Credit Monitoring Limitations and Other Helpful Credit Protection Tools
Credit monitoring comes with numerous benefits, but it also has certain limitations. You might, for example, receive an alert about a new account on your credit report. If you didn’t apply for that new account, the alert could help you discover that someone has stolen your identity and is using it without your permission.
As you can see, credit monitoring doesn’t protect you from identity theft. It merely shows you that there’s a problem on your credit report so that you can take action. If you want to safeguard your credit and try to prevent identity theft and fraud from happening in the first place, there are other proactive steps you can take.
Consider adding fraud alerts to your credit reports if you suspect that your personal information has been compromised.
A credit freeze is even more aggressive and can prevent future lenders from accessing your credit reports unless you “thaw” them first.
Sign up with an identity theft protection company. Some include credit monitoring services in their plans.
Free vs. Paid Credit Monitoring Services
Are you trying to decide whether free or fee-based credit monitoring services are the best fit for you? This side-by-side comparison may help.
Free Credit Monitoring AnnualCreditReport
The Fair and Accurate Credit Transactions Act (FACTA), which is an amendment to the Fair Credit Reporting Act (FCRA), gives you the right to access a credit report from Equifax, TransUnion and Experian once every 12 months. You can claim these free reports at AnnualCreditReport.com. Through April 2021 the three major credit bureaus are voluntarily letting consumers access free reports once a week in response to the COVID-19 pandemic.
These free, federally-mandated reports don’t come with a free credit monitoring alert feature. So you won’t receive a convenient email alert if the information on one of your credit reports changes. But you can review your credit reports yourself and track adjustments to your information over time.
Other Free Resources
There are a number of internet-based companies that offer free credit access or credit monitoring services. Free credit monitoring is understandably appealing. (Who doesn’t like to save money?) But there are some drawbacks to free credit monitoring resources that you should understand.
First, free credit monitoring providers will likely advertise financial products and services to you in exchange for fee-free access to your credit information. If you sign up for an advertised product or service, the credit monitoring provider receives a commission. This isn’t a deal breaker by any means. Still, it’s helpful to understand that these businesses aren’t just giving you free credit access out of the kindness of their hearts.
You should also be aware that free credit monitoring services usually don’t give you access to all three of your credit reports. Rather, you can generally review your information from just one or two credit bureaus. And sometimes, you won’t even be able to download a full copy of your consumer credit disclosure, just a credit report summary.
Free Credit Monitoring Through Your Credit Card Issuer
Your credit card issuer may offer free credit score or credit report monitoring as a customer service benefit. In fact, some card issuers offer free credit monitoring services to cardholders and non-cardholders alike. Here’s a list of credit card issuers that offer a free credit score.
Free Credit Monitoring Options from Data Breaches
Although creditors and the credit bureaus work hard to keep your information safe from thieves, data breaches have become increasingly common in recent years. If your information was compromised in a data breach, such as the Capital One Data Breach of 2019, you may be entitled to free credit monitoring services from one of more of the credit bureaus.
Fee-Based Credit Monitoring
“You get what you pay for” is an old saying that often rings true where credit monitoring services are concerned. There’s nothing wrong with using free credit monitoring services. Yet paying for premium credit monitoring generally comes with more perks.
With fee-based credit monitoring you may be able to keep track of all three of your credit reports and scores through a single account. These services often come with higher amounts of identity theft coverage as well.
Popular Fee-Based Credit Monitoring Services
If you’re considering paying for a credit monitoring service, it’s wise to shop around first to find the best deal for your situation. Costs and benefits can vary greatly from one service provider to the next.
Here are a few of the most popular credit monitoring services you can find online, along with their fees and details about the types of credit reports and scores you can access.
Should I Pay for Credit Monitoring Services?
Every adult should monitor their credit reports and alert the credit bureaus right away if mistakes are noticed. Yet whether you opt to build your own free approach to watch your credit reports or you prefer to pay for a more robust or convenient credit monitoring service is a personal decision.
Do you have the time and discipline to follow through with monthly credit monitoring on your own? If so, reviewing your three credit reports and scores individually might work well for you. Do you have a busy schedule or doubt that you’ll follow through and check your three reports as often as you should? In this scenario, subscribing to a service that alerts you to changes on your credit reports might be a better option, as long as you can afford the cost.