Monday, April 9, 2012

You’re crazy if you pay for credit monitoring!





If you want to keep tabs on your credit report to catch errors, improve your score or keep an eye out for fraud, you might be tempted to sign up for a credit monitoring service.

A credit monitoring service tracks your credit report at one or more of the three major credit bureaus and immediately sends you an alert if any change or suspicious activity occurs.

Personal finance experts are divided about whether these services are worth the cost, but many say signing up can help some consumers. But it's important to be able to distinguish exactly what these services offer, how much they cost and what you can expect in return for your payment.

Here are some tips to help you navigate the pros and cons of credit monitoring services:     

Credit monitoring 101
Basic credit monitoring services usually track your credit reports at one, two or all three of the major credit bureaus -- Experian, Equifax and TransUnion -- and send you an e-mail, text message or letter, depending on your preference, if there's an inquiry or other activity. Many also offer unlimited access to your credit report from at least one of the bureaus, tracking of your credit score, telephone help with fraud resolution and even reimbursement of some out-of-pocket expenses incurred while trying to resolve identity theft or other fraud.

"Credit monitoring services can be helpful for spotting certain problems, such as if somebody opens a new credit account in your name using your stolen information," says Susan Grant, director of consumer protection for the Consumer Federation of America. "But they don't necessarily alert you to every type of identity theft you could encounter. For example, if somebody is using your stolen personal information to get a job or a cell phone -- something that wouldn't necessarily be reported to a credit reporting agency -- then credit monitoring isn't going to pick that up."

Does credit monitoring pay off?
Consumer advocates don't all agree on whether credit monitoring -- which typically costs $10 to $15 or more per month ($120 to $180 a year) -- is worth the money. Some say it's an extra layer of protection that's smart to have, while others say it's unnecessary.

Consumers can monitor their own accounts to catch errors or look for fraud and also can take other free or low-cost steps to protect themselves, but credit monitoring might make sense for someone who has been the victim of identity theft or fears their personal information has been compromised, says Suzanne Martindale, an attorney and associate policy analyst for Consumers Union.
"Monitoring seems more appropriate for someone who has reason to suspect their credit information has been at risk or has been exposed; for example, if you got a notice there was a data breach and your Social Security number might be flying around," Martindale says.

Read more: http://www.creditcards.com/credit-card-news/pros-cons-credit-monitoring-services-1282.php#ixzz1ra1810EX

My Take

You’re crazy if you pay for credit monitoring services!  All the basic services that a credit monitoring services provide can be gotten for free – a saving of up to $180/year. 

I learned this the hard way.  Since 2006, I’ve been paying $9.99/month for credit monitoring services from LegalShield (previously known as Pre-Paid Legal Services, Inc) for their Identity Theft Shield.  In return, most months I would get an email that said “There has been no activity on your credit report.”  Why did I get this email?  Well, because no one had tried to open an account using my social security number.  Of course, when I had taken an action that would be reported to the credit bureaus, the email would tell me that as well. 

I recently canceled my plan (after spending $720 over the past few years) and found a much better and cheaper solution: Credit Sesame

It’s not only cheaper, it’s FREE!


Credit Sesame automatically track and monitor your loans and debt information and tell you how you're doing. You'll see your loans, debt and credit accounts, all in one place. You'll know where your credit score stands every month and understand how to improve your debt situation.

In addition to monitoring your credit, Credit Sesame gives you the right tools to take control of your finances.  Some of the coolest features are:

  • Credit score updated monthly
  • Better options to your current loans and debts
  • ‘What If’ modeling to see how things change – haven’t you wondered what would happen to your credit score if you paid that credit card off?
  • Single portal for applying for new loans
Credit Sesame is accredited with the BBB and is run by a great management team.

Regardless of whether you currently pay for credit monitoring services or not, Credit Sesame’s tools are a must have for anyone who wants to get a better handle on their finances.

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