Credit Monitoring Services Are Not Worth the Cost

Credit monitoring services advertise heavily in the media. For a monthly fee, they promise to alert you of any adverse changes in your credit reports. They are a waste of money for the vast majority of consumers. This is Liz Weston’s conclusion as she reports on the MSNBC Money site.

There are many reasons they are not worth the costs. Number One–they lie. They advertise free credit scores, but the credit monitoring they are selling is not free. Consumers often sign up for and only later realize they agreed to make monthly payments when the bills start coming in.

Some sites suggest they are official, federally mandated sites, but they are not. (AnnualCreditReport.com is the ONLY such site).

The free credit scores are worthless since they are not the FICO scores most lenders use. The three national credit bureaus sell their own scores.

Another lie put forth is that the credit monitoring will protect you from identity theft. It won’t. You will only find out your identity has been stolen after the fact.

The insurance policies some companies advertise are worthless since identity theft victims rarely if ever have to pay out-of-pocket for losses.

The costs are exorbitant for what you get. Costs run $15 to $20 a month, or up to $240 a year, for credit monitoring. Some of the companies don’t watch your reports at all three credit bureaus and not all creditors report to all three bureaus. That causes gaps in what’s being monitored. Also, creditors can be slow reporting changes, especially new accounts, to the bureaus, so you might not be getting as much of a head start on cleaning up any problems as you think.

Most everyone’s credit scores bounce around just because of the ebb and flow payments to creditors. Seeing the changes probably makes people nervous for no reason at all.

A better alternative is to buy your score from myFICO.com for $20 once every few months and following the detailed advice the site gives on how to improve your numbers.

Finally, what the credit bureaus that offer credit monitoring are doing is selling you data that they collect for free from their creditor subscribers. It costs them essentially nothing. The profits are enormous. Why subsidize such a business?

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