⌛ Video Length — 00:04:39
Lesson Summary
There’s never been a better time in history to pay close attention to your credit scores. With fraud on the rise and technology getting swifter, it’s easier than ever to view your credit scores daily, weekly, monthly… or hourly.
If you’ve been a victim of fraud or simply want to be proactive, you may consider signing up for a credit monitoring service to help you stay on top of any changes to your credit file.
But there are some limits to what these services offer, and it’s important to understand how they work before you sign up for a program, especially if you’re paying for it.
In this lesson, we’re going to break down everything you need to know about credit monitoring so you can decide what is right for your needs.
What credit monitoring does
Credit monitoring services do just what the name says — monitor your credit. They track the credit history shown on your credit report, then alert you of changes via email, text or phone. Granted, you can do this on your own, but these services provide an automated and faster way to track changes to your comprehensive credit file.
The exact activity reported by your credit monitoring service varies by provider, but it may include the following:
- Hard inquiries on your credit report, such as someone applying for credit in your name
- New accounts opened in your name
- Balances and payments on your credit products
- New address or name changes to your credit file
- Public records, such as bankruptcies
- Personal information on the dark web, such as your social security number, email address and passwords
It may seem like credit monitoring services keep track of a lot, but these tools have their limits.
What credit monitoring doesn’t do
While credit monitoring is a great tool to spot potential signs of fraud, it’s not a complete approach to preventing identity theft or unauthorized transactions.
When you sign up for credit monitoring, you’ll receive alerts and resources to help you identify and protect against possible theft, but these services can’t actually guarantee fraud prevention. At best, they keep you instantly informed so you can take action as you notice something is off.
Here are several things credit monitoring doesn’t do:
- Stop someone from applying for credit and opening new accounts in your name
- Keep your information safe from data breaches
- Prevent your credit card from being skimmed
- Tell you if someone withdraws money from your bank account
- Warn you if someone files a tax return in your name and collects your refund
- Stop phishing emails
- Report fraud
- Fix credit report errors
- Freeze your credit
If you want to protect from these types of fraud and others, check out our lesson about managing your credit.
Paid vs. free credit monitoring
There are a number of paid and free credit monitoring services that can help keep track of your credit.
Due to a number of high-profile data breaches — notably Equifax in 2017 and Capital One in 2019 — many Americans qualified for free credit monitoring services. But if your personal information wasn’t exposed during a data breach, and therefore you’re ineligible for the mandated free credit monitoring, there are alternative free resources available, as well as paid options to consider.
Keep in mind, just because a service requires you to pay doesn’t necessarily mean it’s better. To determine the best credit monitoring service for your needs, review a variety of options to see what is and what isn’t offered.
Some things to consider.
Does it monitor all 3 credit reports?
Does it offer identity theft protection?