How to Choose the Best Credit Monitoring Services

The term “data breach” has unfortunately become part of the vernacular of hundreds of millions of Americans in the last year. Target, Home Depot, and even banking giant JP Morgan Chase have had sensitive customer information stolen by hackers. Add to that the Edward Snowden revelation that its own government is spying on them, and it’s not an understatement to say that individual concerns about identity theft are at an all-time high in the U.S. Interest in credit monitoring services has risen accordingly.

What Do Credit Monitoring Services Do?

While the features offered by credit monitoring services will vary, they basically track your credit report at one or more of the three big credit bureaus – Experian, Equifax and TransUnion. Depending on your preference, they will promptly notify you via a test message, an e-mail or an old-fashioned letter when they uncover unusual activity as it pertains to your account. They may also provide easy access to your credit report, assist you if fraud has been detected, and even reimburse you for some out-of-pocket expenses you’ve incurred directly related to fighting the fraudster.

What Benefits Do They Provide?

Credit monitoring services can be used to catch errors, improve your score or keep an eye out for fraud. For instance, if someone were to use your stolen personal information to apply for a new credit card in your name, the monitoring service would pick this up and send you an alert. However, if someone were to try to use your information to get a job or a cell phone, something that wouldn’t necessarily trigger a credit check with the reporting agencies, a basic credit monitoring service won’t be able to know. For this reason, more providers are now offering more comprehensive monitoring. The top-of-the-line plans can use Social Security number monitoring to check public records, databases and websites for use of your personal information.

The single biggest reason to use a credit monitoring service, however, often goes unnoticed. While most people understand the importance of their credit score, few really understand what goes into compiling it. Regularly reviewing your credit history leads to better credit knowledge, being cognizant of how your behavior, be it applying for that department store card, getting a car loan, or knocking down a big chunk of credit card debt, impacts your credit rating. If as they say, knowledge is power, then knowledge of how your actions impact your credit score can put you in charge of your financial well-being.

What Are The Best Credit Monitoring Services Available Today?

identity guard id theft protectionIdentity Guard and LifeLock are two of the better known credit monitoring services. Each offers different package and pricing options. Generally speaking, Identity Guard’s top-of-the line package is considered superior for those who can afford it. It’ll cost you a couple hundred bucks a year. However, Identity Guard monitors all three major credit bureaus for changes to your reports, and it monitors personal information like how your name and Social Security number are being used across thousands of databases.  It’s one of the most respected identity protection services on the market.   Read more about IdentityGuard.com here.

life lock ultimateLifeLock goes a bit beyond in the sense that they monitor other publicly available information about you. If one of the bad guys attempts to steal information pertaining to your loans or leases, your criminal record or your driver’s license and insurance, for instance, LifeLock Ultimate can alert you before it becomes a serious problem. If you’re undergoing a background check for a new job, for example, having access to this information is something you can control. LifeLock, however, does not regularly monitor all three major credit reporting agencies. For better or worse, it has decided to exclusively  use the TransUnion bureau.  For this reason, I prefer the IdentityGuard.com service over LifeLock.  See more about LifeLock plans here.

Tips For Choosing a Service

Knowing who is doing the monitoring is important. In addition to companies like Identity Guard and Life Lock that do so directly, banks and credit unions, and the credit bureaus themselves, all offer monitoring services. It’s possible that the entity that is selling the service is actually farming out the actual work to another entity. It’s good to know exactly who’s doing the work before signing up for any monitoring service. Similarly, it’s important to look at the longevity of the company, and be wary of any company that offers very little background information.

Not unlike any other service offering, be wary of companies that make over-the-top promises. If those promises sound too good to be true, they probably are. In particular, it’s important to be wary of claims that a company can prevent identity theft. No credit monitoring service can do that. What they can do is be on the lookout for suspicious activity, and notify you promptly if they spot any.

The Bottom Line

It never hurts to check with the Better Business Bureau or your state’s Attorney General office to verify the legitimacy of a credit monitoring service before signing up for one. While fear-mongering is the antidote for nothing, hard times, whether they are of your own creation or the result of outside influences, need to be dealt with. The 2008 financial crisis has resulted in an environment where credit precautions have become a necessity for many.