11 February 2014
Should You Pay for Credit Monitoring? Consider the Pros and Cons

Your credit reports from the three major reporting agencies – TransUnion®, Experian® and Equifax® – can affect everything from the mortgage rate you pay, to whether you’ll qualify for a car loan.

An “iffy” credit report can limit borrowing options, while a squeaky clean credit report may get you that line of credit you need. Smart consumers track their credit reports to ensure the information they contain is accurate.

Many consumers purchase credit monitoring services – services that deliver messages any time your credit report is viewed or, worse, changed without your knowledge.

Should you pay a monthly fee for credit monitoring? There are pros and cons, and even personal security experts don’t necessarily agree.

Credit monitoring doesn’t prevent identity fraud or theft.

Credit monitoring services notify you when there are changes to your credit report, but the changes have already taken place, and your credit history may already be compromised.

In other words, even the best credit monitoring services can only tell you what has happened, not what will happen. You may sleep better, but credit monitoring doesn’t necessarily protect against credit fraud until a crime has already been committed.

You’re not responsible if someone illegally obtains a credit card in your name. The good news? If you didn’t sign the credit card agreement, you’re not responsible for the charges.

The bad news? Those unpaid, disputed charges can show up on your credit report for months. We’ve all heard horror stories of victims of identity theft who’ve lost thousands of dollars, and spent years repairing the damage done to their hard-earned credit.

So, while you may not have to pay some thief’s bill, you could still have problems with a blemished credit report with an unresolved issue appearing each month.

Then there’s the cost. A credit monitoring service may only cost $10 a month, which may not seem like much, but just what are you getting for your subscription payment?  The credit monitoring business offers a variety of plans, from basic nuts-and-bolts to the full treatment, at increasing subscription prices, of course.

What services should you look for from a quality credit monitor?

  • Protection should cover all three major credit bureaus.
  • You should receive a text, an email message, or even a letter each time your credit report is accessed.
  • Look for unlimited access to your credit history so you can check it for yourself frequently, i.e., self-monitor your credit history.
  • Make sure your contract provides your credit score – a number computed based on amount of outstanding debt, payment history, incomes, and other factors routinely reported to the credit agency.
  • Your monthly subscription fee should come complete with a toll-free telephone number so you can talk to a human who can initiate an investigation of suspicious activity, and add a fraud alert to lock down your account until the problem is resolved.

This is a case where it pays to shop around. You may find one monitoring service with a low price and few services, while another  charges a few dollars more but delivers many more services.  Do some comparison shopping to get the most services for the lowest monthly cost.

Should you have credit monitoring services? Much of what consumer monitoring services provide can be done on your own at no cost. If you go to www.annualcreditreport.com, you can request a free credit report once per year from the three major credit reporting agencies at no cost and no obligation.

You can also put a fraud alert on your credit card account for a pre-determined number of days, all on your own to prevent suspicious activity.

For most people, simply tracking their credit report annually is enough protection. On the other hand, consumer monitoring adds another layer of protection against credit card and identity fraud. This could be important if any of the following circumstances apply to you:

  • Your identity has been compromised in the past.
  • You’ve seen suspicious activity on your credit report – huge mistakes that appear on your credit history.
  • You’re going through a divorce and share joint accounts.  Credit monitoring may help to simplify this difficult process.
  • You’re working to improve your credit profile.  Seeing positive results can be great motivation. You may enjoy accessing your reports as your credit improves through hard work and careful financial planning.

Credit monitoring can provide a measure of security, and only you can determine if the cost and benefits are a good value based on your own situation and your tolerance for risk.

In either case, don’t leave it up to the monitoring service to track what’s going on with your credit report – your personal economy. Stay on top of your credit history to enjoy the benefits of a good, clean, accurate credit report.

The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice.

TransUnion® is a registered trademark of Trans Union LLC, Experian® is a registered trademark of Experian Corporation, and Equifax® is a registered trademark of Equifax, Inc. Nevada State Bank does not claim any ownership or exclusive rights to the use of these trademarks.



Powered by Facebook Comments

This icon will be included whenever we link to a website that is not owned or operated by Nevada State Bank or Zions Bancorporation. These third-party websites are not affiliated with Nevada State Bank or Zions Bancorporation and may have a different privacy policy and level of security. Nevada State Bank and Zions Bancorporation are not responsible for, and do not endorse or guarantee, the privacy policy, security, accuracy or performance of the third-party’s website or the information, products or services that are expressed or offered on that website.