| Fraud ID Theft Credit Monitoring |
| By Credit Federal |
Published
08/9/2008
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Credit Report
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Using credit monitoring services as protection against fraud and identity theft
The fact is, credit monitoring services do not provide protection against identity theft. Instead, they give you a quick heads-up after suspicious activity has already occured. It's simply an early-warning system that enables you to more quickly respond.
Some of the suspicious activity a credit monitoring service would alert you about includes a credit card balance that has risen sharply, an inquiry (application for new credit) has been placed on your report, and a change to your billing address.
As you can see, a credit monitoring service doesn't actually protect against identity theft and fraud. When you sign up for a credit bureau's monitoring service, you'll only be alerted to changes in your credit report with that bureau. But what if an identity thief opens an account with a bank that doesn't report to that bureau? Chances are, the credit monitoring service won't know about it and nor will you until debt collectors start calling.
Even 3-in-1 credit monitoring isn't foolproof because a thief can open accounts in your name that don't require credit checks and aren't reported to the credit bureaus.
According to ConsumerReports.org, you might not be notified if a thief uses your social security number with a different name, because credit bureaus don't link together accounts with the same social security number and different names. There are other shortcomings. Credit bureau reporting delays also mean a delay for you receiving a fraud notification.
Considering the cost of credit monitoring services, you may be better off putting that money toward your debt. However there may be some situations when you might find it worth the cost:
- If you're working towards improving credit, it may be cheaper to hire a credit monitoring service instead of paying for new reports every month. Otherwise, you're only entitled to your annual free credit report.
- If you've been the victim of identity theft. A credit monitoring service can help you keep an eye on your credit. However, as a victim you can freeze your credit report for free, or another cheaper option is to put a fraud alert on your credit report.
Learn more about how to freeze credit reports, and to prevent identity theft.
Review information about Equifax, Experian and TransUnion.
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