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Identity Theft Credit Monitoring

Identity Theft Protection Programs - Components and Analysis


Identity Theft Credit Monitoring
Getty/Steven Hunt

When you are looking into an identity theft protection program, credit monitoring is almost always a component of the service. But what is the real value? More importantly, is it worth the money? The short answer is usually not.

Identity theft credit monitoring programs are a service to keep track of your credit, and let you know if there are any significant changes. When looking at a credit monitoring program, make sure to find out how often the credit account is checked. Some credit monitoring only checks the account once a month, or perhaps only once per quarter. A lot can happen in that time, and for some identity theft recovery processes, you only have 30 to 60 days to make your disputes and claims. If you're going to pay for an identity theft credit monitoring program, it should check your credit every day, preferably the monitoring company should tell you as soon as it hits your account.

Some identity theft credit monitoring programs will also give your credit score. These may or may not be very useful, depending on whether they are taking information from one bureau or all three. And credit scores have been known to very between Equifax, Experian, and TransUnion.

Another drawback to identity theft credit monitoring programs is that they only notify you want something has happened. In other words, things had to go wrong in the first place, or else the program has nothing to report. A good program will at least tell you that they check your credit report once a month, and we'll tell you that they did not find anything wrong. An e-mail is usually what to expect here.

But the program does not do anything to stop identity theft from happening. You can put a fraud alert on your credit account for that, but this is something you should do yourself, the standard fraud alert is only good for three months. When there is a fraud alert on your account, no action can be taken with your account unless you're contacted first. This will stop most financial identity theft that is related to your credit.

A credit monitoring service does not monitor your bank account though. You'll have to keep an eye on that yourself. This is not a problem for most of us, since we look at our bank account frequently. And identity theft seldom happens where we are looking. If you are the sort of person who does not look at your bank account for a few days, however, problems can creep up. So even if you have a credit monitoring program, make your bank account a regular habit.

Of course, credit monitoring does not fix anything, it only tells you about it. You could consider it a smoke detector for your finances. You can't fix a problem until you know about it, and when you do know about it, you might want some help putting things back to the right.

FACTA gives you access to your credit reports once a year for free. You can go to the government's annual credit report website and order them online. The drawback here is that you only get one a year, and if a lot can happen in a quarter, imagine what could happen in a year. This is not to say you shouldn't review your free annual credit report, and your Guide has always recommended pulling only one every four months from each of the credit reporting companies. Information is frequently exchanged between these companies, and what shows up in one place will often show up in another as well.

Most identity theft protection programs offer credit monitoring as a component of their program, because they understand these limitations. However, if the identity theft protection service that you're looking at does nothing more than credit monitoring, you can probably find a better use for your money.

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