Credit Monitoring Services Are a Waste of Money — Free Alternatives Are Available

Writing in the San Francisco Chronicle, Kathleen Pender demonstrates that the credit monitoring services offered by the credit bureaus and other companies at a cost of $60 to $200 a year are a waste of your money. The services won’t detect many types of identity theft and it is pretty easy to check your credit reports for identity theft for free.

Credit monitoring services promise to notify you of “key” changes in your credit reports by email or cell phone text message. How soon you are notified varies; Equifax offers daily notification, but the notification could be 30 days after a lender’s report because some lenders to the credit bureaus every 30 days. Another problem is that some monitoring services only check with one of the three major credit bureaus. None of the services can prevent existing account fraud, which is a thief stealing and using your credit card and name. Nor can the services alert you that someone is using your debit card, your medical ID information, or someone using your social security number to get a job.

Everyone is entitled to a copy of their own credit report at no charge once a year. A Consumer Action spokesman says to pull your report from one credit bureau in January, another from a second credit bureau in May and the third in September. The free reports are available a www.annualcreditreport.com. Some services advertise they will get your name off of credit card solicitation lists, but anyone can do so at no charge by going to www.optoutprescreen.com.

Consumer may also put fraud alerts on their credit reports at no charge. They must be renewed every 90 days and there is some question whether they are of much value. More effective is a credit freeze, which makes your credit information inaccessible without your express consent. There is a $10 charge per credit bureau for California consumers. Freezes must be initiated separately to Experian, Equifax and Trans-Union.

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