Credit Monitoring is a service usually provided by a consumer reporting agency that will “monitor” your credit and alert you to any changes for a fee. Typically these services operate by notifying you if anything unusual or suspicious appears on your credit file. The thinking behind this service is to detect any problems immediately and react to it before further damage is done. By definition this is not a proactive service but a reactive one. You are detecting the damage after it has occurred. Combining some form of credit monitoring with proactive methods like fraud alerts and credit freezes is a highly effective strategy to protect you against identity theft.
How does it protect you?
Credit Monitoring products are designed to alert you to any changes in your credit file. As opposed to reviewing your credit report once a year, credit monitoring allows you to take immediate action once any unexplained changes or suspicious charges are made to your credit report. Early detection means you’ll be able to address problems as they occur and not after significant damage has been done.
What are the limitations?
The credit monitoring products only address problems after they have occurred and then only to accounts that report to the CRAs. It will not prevent fraud or alert you to credit issuers who do not update your information with the CRAs. The effectiveness of credit monitoring is completely dependent on financial institutions updating their information with the CRAs and the unfortunate reality is there are and will continue to be companies that do not report to the CRAs. It is a reactive process and not proactive one. ID Protection Guide recommends a combination of credit monitoring and fraud alerts and/or credit freezes.
Who do we like?
IdentityGuard is the only company that gives you quarterly updates to your credit file with all three CRAs and will email you immediately if there are any changes to your credit file. They will also include your FICO score with these reports. IdentityGuard has proprietary software that can scan credit application databases for fraudulently submitted credit applications in your name giving you proactive defense. IdentityGuard’s background providing credit monitoring solutions for a number of major financial organizations clearly shows in their consumer offering. It is our choice for the most comprehensive credit monitoring plan available.