Is Credit Monitoring Worth the Money?

You’ve likely seen the offers for credit monitoring services that promise to monitor your credit file and notify you within hours of any changes. Typically, a monitoring service will notify you of changes to your credit file that occur as a result of new inquiries, late payments, new accounts opened in your name, address changes, new employers, bankruptcies and other public records and more.

So is credit monitoring worth the money? Well, that’s a personal choice that depends largely on your specific situation and if you have a spare $100-$150 per year that you want to spend on monitoring services. Here’s some information that can help you decide for yourself.

Credit monitoring benefits

• Alerts and notification. Credit monitoring does indeed offer you value in that you will be alerted, albeit not necessarily as fast as they would like you to believe, in changes in your credit report. If an identity crook is opening new accounts in your name, changing your address, or otherwise causing changes in your credit file, then you will get notified of those changes. And the sooner you know of potentially fraudulent activity, the sooner you can do something about it to minimize the financial impact to you.
• Credit management. In addition to alerting you for fraudulent activity, credit monitoring can actually assist you in managing your credit.

Credit monitoring limitations

Understanding the limitations of credit monitoring is a critical step toward deciding if it’s right for you. Among its limitations, credit monitoring:

• Doesn’t detect all types of fraud. There are plenty of fraudulent acts that can occur that don’t cause changes to your credit report and therefore aren’t included in credit monitoring alerts. If an identity crook compromises your existing accounts, steals and uses your Social Security number with another name, or opens an account that doesn’t require a credit check, credit monitoring won’t help you.
• Is expensive. For some, credit monitoring is pricey at $100-$160 per year for services that, for the most part, you can do yourself. Some folks would rather spend that money on something else.
• Isn’t as real-time as advertised. You’ll notice that many services boast about daily monitoring. The reality, however, is a bit different, especially when you realize that creditors often delay their reporting to the credit bureaus.
• Isn’t your only option. There are alternatives to monitoring, such as identity-monitoring services that might cost less. Plus, you can do a fair job of monitoring your credit reports yourself for free. While not as “real time” as a monitoring service, you can get a free report from each of the bureaus and examine these reports for changes several times per year. Due to the cost of credit monitoring, this can be an appropriate alternative for some.

In the end, whether or not credit monitoring is worth the money is a decision that you have to make. It provides a good amount of value, but it might be cost-prohibitive for some people, and they might choose an alternative.

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