Comparing Credit Monitoring Services
What Are Credit Monitoring Services?
In a world populated with too many devious individuals, credit monitoring gives you another layer of protection against identity theft and fraud. It involves having your credit report monitored for fraudulent activity, which is done through a credit-monitoring service.
Often identity theft is committed by skilled computer hackers who access your financial information without leaving a clue behind. By the time you realize something is amiss, the criminals are long gone, and you are left with a financial nightmare, including ruined credit. Active credit monitoring allows you to thwart identity theft early when criminals are most likely to be apprehended and damage to your credit is contained.
Identity Theft Is a Growing Menace
According to the Federal Trade Commission, over 10 million consumers are victimized by some form of identity theft each year. Besides being one of the fastest growing crimes in the United States and Canada, it is an ever-evolving threat to consumers as cyber criminals constantly refine their skills. To prevent identity theft from happening, growing numbers of consumers are turning to credit-monitoring agencies to oversee their credit report.
Realizing there was a need for this service, credit monitoring agencies began offering credit monitoring to consumers. And in the last few years, many other companies have also joined the field.
How Does Credit Monitoring Work?
Credit monitoring can either be done by the consumer or through a credit-monitoring service. For the latter, a monthly fee is paid to have your credit report monitored daily or weekly. With the service, any changes to your credit report are automatically sent to you by email, alerting you at the earliest possible time. Someone may be trying to open an account under your name, or may be using your social security number, or may be making purchases on your credit cards, etc.
Three-bureau credit monitoring offers the highest level of protection and security, since all three major credit reporting bureaus (CRAs) are monitored. Although it is the more costly choice, it ensures that you are informed of all changes made at each bureau.
If you do your own monitoring, you must keep abreast of the changes made on your own credit report by ordering your credit report frequently, and from all three CRAs. Although not a fool-proof protection against criminal activity, credit monitoring is the best available defense against identity theft and fraud.
Other Points to Consider
Credit monitoring offers other benefits besides added security to your accounts. Credit monitoring is also a good way to monitor credit expenditures since it can provide you with pertinent information on your spending habits throughout the year. In addition, it can point out errors on your credit report, which then can be promptly and properly amended. Accounts which are no longer used can be permanently closed, reducing the amount of financial information available on your finances in cyberspace.
Since credit monitoring cannot guarantee complete protection against fraud, consumers are advised to take the following steps to further reduce the possibility of identity theft:
- Shred personal and financial information papers before discarding
- Delete unsolicited emails before opening them up
- Use strong passwords that avoid the obvious, such as birthdates or numbers in sequence (many sites now let you know the strength of your password, make sure it rates strong or excellent)
Reference:
1. Federal Trade Commission, Amended Free Credit Reports Rule Helps Consumers Avoid ‘Free Offers’ That Cost Money, April 1, 2010, http://www.ftc.gov/opa/2010/04/freecredit.shtm