Credit monitoring is one of the most misunderstood areas of consumer credit management. Many people don’t realize both the benefits and the limitations of credit monitoring services. Each of the major credit bureaus, Equifax, Experian, and TransUnion offer monitoring services on consumer credit reports, as well as private credit monitoring companies. With so much misinformation available about credit monitoring services and products, it’s important to learn the truth about this area of personal finance.
Let’s Review Some Credit Monitoring Myths
Myth #1 – Credit monitoring services are only for people with excellent credit
Many people assume that credit monitoring is unnecessary if they have less than desirable credit. This couldn’t be farther from the truth. Regardless of your credit standing and scores, identity protection is important. Identity thieves preying on innocent victims don’t know what your credit scores are with each of the three credit bureaus or credit report agencies. They only know they’ve got your personal information and are ready to use it.
Myth #2 – Monitoring my own credit is just as good as a credit monitoring service
Professional credit monitoring services monitor your credit 365 days a year, http://www.consumer.ftc.gov/articles/0235-identity-theft-protection-services. Thieves don’t take a vacation and neither does your credit monitoring service. While monitoring your credit report for changes is advisable, without a monitoring service, you may not catch errors or criminal activity on credit reports immediately after your credit has been breached.
Myth #3 – Monitoring services for credit protection aren’t worth the cost
While monitoring companies do charge fees for their services consider the cost of placing a credit freeze on your reports through all 3 credit bureaus. Each time you request a freeze the charge is approximately $10.00.This fee is applied to initiate freezes as well as removing them, from each bureau involved.Over time the cost of freezes can be greater than charges for professional credit monitoring services.
Myth #4 – Identity theft insurance covers any type of id theft
There are some instances where id theft protection may not cover victims. Most companies, for example will not pay claims on identity theft committed by family members. Unfortunately, theft by someone you know, who has access to your account information is very common.
Myth #5 – If I have credit monitoring protection, no one can steal my identity
Not even the best credit monitoring service or identity monitor can prevent thieves from stealing your personal identifying information or account numbers. Fraudsters find new ways every day to hack accounts and databases throughout the nation, to gain consumer information.
What a monitoring service can do however is alert you immediately to changes in your credit profile unauthorized by you. This saves money and precious time calling credit bureau phone numbers since thieves can’t make purchases once you alert your bank or credit card provider to possible fraud.
Myth #6 – Credit monitoring detects every type of identity theft
There are a few instances where credit monitoring cannot detect fraudulent use of your personal identifying information. If someone is using your name or Social Security number to sign up for cell phone service for example, the provider may not run a credit check on you which would trigger a fraud alert.
Understanding the importance of protecting your credit reputation and personal identity is critical to managing your finances. Choosing the right monitoring services and products can save you time and money spent resolving credit report inaccuracies and personal identity fraud. The more you learn about credit protection and the freedom credit monitoring affords, the more you’ll be better informed to make good decisions for your financial future.