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Credit monitoring services notify you of changes to your credit reports and can alert you if there are mistakes, instances of fraud or just room for improvement.
It's important to understand how these services work before you sign up for a program, whether free or paid.
What credit monitoring does
Many people turn to credit monitoring services as a safeguard against identity theft.
They track the history shown on your credit report and alert you of changes via email, text or phone. You could do this yourself, but these services provide a faster, more in depth way to track changes to your comprehensive credit file.
The exact activity reported by your credit monitoring service varies by provider, but it include the following:
- Hard inquiries on your credit report, such as someone applying for credit in your name
- New accounts opened in your name
- Balances and payments on your credit products
- New address or name changes to your credit file
- Public records, such as bankruptcies
- Personal information on the dark web, such as your Social Security number, email address and passwords
While credit monitoring is a great tool to spot potential signs of fraud, it's not a holistic approach to preventing identity theft or unauthorized transactions. Here are several things credit monitoring doesn't do:
- Stop someone from applying for credit accounts in your name
- Keep your information safe from data breaches
- Prevent your credit card from being skimmed
- Tell you if someone withdraws money from your bank account
- Warn you if someone files a tax return in your name and collects your refund
- Stop phishing emails
- Report fraud
- Fix credit report errors
- Freeze your credit
Paid vs. free credit monitoring
Several paid and can help keep track of your credit.
Experian offers two credit monitoring services: CreditWorks℠ Basic and CreditWorks℠ Premium. The Basic plan is free, while Premium currently costs $4.99 for the first month, then $24.99 per month.
Both plans provide different services: The Premium plan offers a more extensive monitoring service that checks credit reports from each of three credit bureaus, Experian, Equifax and TransUnion, versus the Basic plan, which only looks at Experian.
In addition, the alerts you receive with the Basic plan only include new credit inquiries and new accounts — not balance changes, credit utilization, dormant accounts and other features offered with the Premium tier.
How to protect yourself from fraud
Credit monitoring can be part of a comprehensive way to protect yourself from fraud. Here are some tips:
- Freeze your credit reports: Credit monitoring isn't the same thing as freezing your credit. If you want to ensure that all of your reports are inaccessible to fraudsters and new accounts can't be opened in your name, freeze your credit reports with each credit bureau. While credit monitoring may charge a fee for tracking your credit history, freezing your credit is free.
- Monitor your credit: Even if you freeze your credit, you should still regularly check your credit reports. You can now receive free weekly copies of your credit report from each of the three bureaus. In addition, check your credit score and credit card accounts for any unexpected information or transactions. If you notice anything out of sorts, dispute errors ASAP.
- Be wary of ads, emails and spam phone calls: You may receive what seem like great deals or limited-time offers that require you to act fast, but you should verify they're legitimate before clicking or sharing any personal information. If you don't know the company or sender of an email or who's calling on the phone, that can be a red flag. Look up the information online and make sure you only go to sites that are "https" — with the "s" representing secure.
- Secure your information: Make sure any personal information isn't accessible to strangers. Consider storing passwords in a secure app versus writing them on a piece of paper and locking your social security card in a safe.
While there's no way to completely prevent fraud, the Citi Double Cash® Card (see rates and fees) and the Blue Cash Preferred® Card from American Express both offer $0 liability on unauthorized charges. That means you won't be held liable for unauthorized charges on your account when you catch them early and report them.
For rates and fees the Blue Cash Preferred® Card from American Express, click here.
