Credit Monitoring: What Is It, Do You Need It, and Is It Worth It?

You hear so much about identity theft ruining credit scores and financial lives. And yet you always think it's not going to be you, until it is.

If you've never faced having to clear your good name and financial reputation for years on end, consider yourself lucky.

While you can't 100% prevent identity theft, you can however have someone in your corner ready to stop it and fight it: a credit monitoring service.

What is credit monitoring?

A credit monitoring company will keep a constant eye on your credit to make sure there is nothing fishy going on.

If a late payment shows up despite you having paid on time, you’ll get notified.

If a fraudster opens a credit card in your name, you’ll get notified.

The faster that these inaccuracies or frauds can be found, the less damage it will be in the long run to your credit history.

How much does credit monitoring cost?

Credit monitoring typically costs in the rage of $15 to $20 per month.

While it doesn't sound like a lot for that extra layer of protection, it does add up to $180 to $240 per year.

Here are the prices of some of the most popular credit monitoring services:

  • IdentityGuard: $7.50 per month
  • IdentityIQ: $29.99 per month
  • IdentityForce: $14.99 per month
  • CheckFreeScore.com: $9.95 per month
  • myFICO: $19.95 per month
  • Equifax: $17.95 per month
  • My Score: $29.95 per month
  • SmartAsset 360: $14.99 per month
  • Free Scores and More: $19.99 per month
  • AARP: $12.99 per month
  • Privacy Guard: $19.99 per month
  • Trusted ID: $14.99 per month
  • Truecredit $17.95 per month
  • CreditReport.com: $24.95 per month
  • TransUnion: $17.95 per month
  • Experian IdentityWorks: $19.95 per month

Do I need credit monitoring?

Every single one of us is a potential target for identity theft and credit fraud. There’s a good chance that all of you reading this have either been a victim of identity theft or fraud or know someone who has.

With hackers always staying one step ahead of security and technological advances, many companies are now offering credit monitoring services.

The massive data breaches that have struck during the last few years have put hundreds of millions of Americans at risk for identity theft and credit monitoring is one of the best defenses for securing your finances and credit.

Do I have credit monitoring already?

You may already have free credit monitoring. Credit cards, like Capital One, give members access to basic credit monitoring for free.

Credit Karma offers free basic credit monitoring too.

While the service is basic, it does alert you of updates to your credit report.

But, you'll find these updates may be delayed, or might never arrive if the update was shown on a credit bureau they don't monitor.

And, what if something does happen. What are you going to say to your spouse?

"Don't worry honey! We're protected by this here app on my iPhone!"

- Clueless Spouse

Sticking to a free credit monitoring service such as the one offered by your credit card or Credit Karma may sound like a good idea...

But credit monitoring doesn't prevent identity theft - it just alerts you of it. If you want true post-identity theft help, you're going to need to use a paid credit monitoring service.

Best credit monitoring service in 2020

IdentityGuard tops my list as the absolute best credit monitoring service available in 2020.

They aced the two main categories that I tested them in: Consistently and accurately monitoring our credit history for even the slightest of missteps, and providing the best Identity Theft Protection on the market today.

IdentityGuard will monitor all three credit-reporting bureaus and notify you of any changes whatsoever. It can be a late or missed payment, or it can be that your shady brother in law tried to apply for a credit card in your name. Whatever the case, they’ve got you covered.

  • Monitoring everything, everywhere

Another cool feature that really sold me on IdentityGuard was their off-site monitoring. They will monitor your name and social security number across thousands of databases to ensure your identity hasn’t been stolen, and isn’t being sold somewhere (like on the dark web).

Did you know your children can have their identity stolen as well? IdentityGuard has a family plan that will ensure the identity of your little ones is safe and sound.

This will prevent them from finding some unwanted surprises when they turn 18 and start trying to establish their own credit

  • Million dollar insurance policy

What happens if you have an IdentityGuard subscription and still fall victim to identity theft? They’re so confident that their services work that they have got many safeguards in place should your identity actually get stolen.

For starters, they have a victim hotline to ensure you get to a live representative immediately that will help you start the recovery process.

They even have a $1 Million insurance policy on your identity so, should you incur any losses, you will be covered financially with no issues.

  • Address change monitoring included

They really help you cover all the bases. They even have address change monitoring. If someone tried to have a bank or credit card statement redirected to a different address, you’ll get a notification. If someone tries to file taxes under your SSN, you’ll get a notification.

If you truly want the best credit monitoring and identity theft protection, go with IdentityGuard. They even use IBM’s Watson to ensure you’re getting the best possible protection and that human errors will never play a role in negatively affecting your credit score or identity.

  • What about LifeLock?

When searching for credit monitoring you’ll probably come across a very well-known company called LifeLock.

Did you know that their CEO has had his identity stolen numerous times? Despite the fact that he owns and operates a company that is supposed to protect against identity theft. Seriously, just go with IdentityGuard.

Is credit monitoring the same as identity theft protection?

Credit monitoring is not identity theft protection. Credit monitoring services only monitor changes in your credit report.

However, the good news it that many of the paid monitoring services go the extra mile and protect your identity as well.

Many of them, such as IdentityGuard, scan the dark web and social media to find instances of your identity possibly being stolen.

How do you know if your identity was stolen?

Being the victim of identity theft is never a fun thing to go through. There are so many security breaches and countless methods of gaining access to your information.

So while you may not be able to prevent becoming a victim of ID theft you can minimize the damage by stopping the thieves early on.

Keep at eye out for these 5 early warning signs that your credit card account has been compromised.

  • Your Credit Card Is Declined

It’s embarrassing as well as infuriating when you go shopping and your credit card ends up being declined. But it is especially infuriating when your card is declined even though you have good credit.

Rather than brushing this decline notice as an anomaly, look into it further because it could be a clue your identity has been stolen.

Often times an unexpected decline is your very first clue that your credit card account has been compromised.

If this happens to you, go home and log into your account (or check it with your smartphone app) on the spot.

See what your balance is. If a thief has gotten into your account they may have racked up so many charges that you’ve reached your credit limit, causing the decline alert.

  • Calls From A Collections Agency

If a collections agency begins to call you – your identity may have been stolen. If you are current on your bills and have no known unpaid debts, then a call from a debt collector demanding payment would be awfully strange.

Ask them for information about the debt such as what company is owed money, how much is owed and when it happened.

If the debt is not yours, either the collections agency is wrong or your identity was stolen. Contact the store in question regarding the details of the transaction.

Be sure to investigate and get to the bottom of it as soon as you can.

  • Odd Charges On Your Statement

If you see strange charges on your checking account or your credit card bill, it’s a clear warning sign. Even if the charges are just for a few pennies or dollars, do not ignore this warning sign.

Trust me, these small charges are just a sign of much larger charges to come.

Contact the issuer of your card immediately so they can deactivate that card to minimize the damage.

Often times credit card numbers are tested with a small purchase to see if the card works. If it does the thieves prepare themselves to make large purchases with your valid and working credit card.

  • You Stop Receiving Your Monthly Statement

Any change to your bank or credit card accounts is a red flag. Everything from a mysterious charge, an unexpected package in the mail to a password that no longer works is cause to be suspicious.

Another red flag to look out for is if you no longer receive your statement in the mail.

If you stop getting your statement this could mean that an identity thief has gained access to your account and changed the billing address.

They do this so they can rack up charges over the course of several months, hoping you don’t notice because you don’t see your bill.

To avoid this, set up alerts on your account that notify you via email or text message every time there’s a charge on your account.

It may be annoying to receive a message on every transaction but it will give you more peace of mind knowing your credit card isn’t being misused.

What to do if your identity has been stolen

The worst thing imaginable to your credit has happened: someone has stolen your identity. You’re hurt, you’re angry and you’re shaken, so what do you do now?

Keeping a cool head in the face of crisis is key to repairing damage done by a credit thief. It allows you to tackle the problem and minimize the harm done to your credit score.

Here are three things you must do if the credit thieves get to you.

  • Report The Fraud

First, once the fraud is discovered, you’ll need to call each of the major credit bureaus and report it immediately.

Ask that a fraud alert is placed on your profile and that no new lines of credit are permitted without your approval.

You’ll need to make a statement in writing of the fraud and provide any documents you have to support it, such as bank statements, credit card statements, etc.

If possible, include the name and location of stores where fraudulent purchases were made. This is especially helpful if the illegal actions happened several states away.

Showing a purchase made at a California Walmart and a purchase made at a North Carolina Walmart on the same day is proof positive that something fishy was going on.

  • Cut The Thief Off

You’ll also want to immediately close or freeze accounts that were fraudulently opened or accessed.

To do this, call the credit lender and speak with their fraud department. Many credit cards have specialized agents to handle cases of fraud.

They will freeze the accounts and prevent the thief from making any more purchases. If the activity occurred on one of your regular cards, odds are that your account number will be changed and a new card will be issued.

Many lenders have a task force of agents that can look into each individual case. These detectives can be invaluable in helping you gather hard evidence of the fraud, so make sure to give them as much information as possible.

Often, the thief doesn’t get caught, but if he does, you can use the evidence gathered to prosecute him.

  • Keep Records

Write down the events along with account numbers, locations, purchase amounts and any other important information you can think of.

Keep track of who you talk to and when. Having a written account of everything that happens will help keep you organized and make it easy to remember what steps were taken and when.

You’ll want to follow up on any investigations that are launched or any actions that are promised to make sure everyone follows through.

Most importantly, learn from your mistakes. If you can figure out how the identity thief got your information, you can correct the situation and prevent yourself from being victimized again.

Sample credit dispute letter

If you find errors on your credit report, whether because of identity theft or a mistake, you need to write the 3 major credit bureaus a letter to correct their records.

Here is a sample template you can use:

Date: 01/01/2021

Name of Credit Bureau
Mailing Address of Credit Bureau
City, State, Zip

Recently I obtained a copy of my credit report and have found incorrect information.

I have attached a copy of my credit report with the items I am disputing circled in red.

This item (identity the precise one), which is a (identify what it is) is inaccurate because (explain why).

I am attaching copies of (explain what documentation you are providing as proof such as payment records) to support my claim.

Please re-investigate this and delete the disputed items as soon as possible.

Sincerely,
Your Name

Is credit monitoring worth it?

Here's the thing, it's like insurance. You don't need it until you need it.

Here's my take: If you have homeowners insurance, auto insurance, health insurance and life insurance - credit monitoring isn't an unreasonable service to have.

As far as which credit monitoring service to choose, my vote goes for IdentityGuard's family plan for $12.50 per month.

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Edwin Contreras


Edwin Contreras is the money hacking millennial behind Cash The Checks. He lives a minimalist lifestyle and is always eager to learn and share his methods to save and make money.

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