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Credit Monitoring

Build credit, monitor your credit score, keep an eye out for fraudulent activity and prevent identity theft, all with one simple tool.

Some financial tools can make all the difference between just getting by and actually succeeding. Credit monitoring services definitely fit that bill. They are not necessary to your everyday financial stability, but they can make all the difference if you’re trying to achieve an excellent or even good credit score.

What is credit monitoring?

Credit monitoring can move you forwards towards your goalCredit monitoring refers to any tool that tracks changes in your credit reports and/or credit score. Most tools include both. A credit monitoring service alerts you to changes in the information contained in your credit report. In addition, it also tracks your credit score, so you know exactly where you stand.

The best credit monitoring services monitor all 3 credit reports and your credit score. In most cases, the score it tracks is the VantageScore 3.0 or the scoring model from a specific credit bureau. Experian, Equifax and TransUnion each have their own scoring model. VantageScore was a model created by all three to compete against FICO. That’s the credit score used in 90% of financing decisions.

Learn more about what monitoring is »

How credit monitoring works

  1. First, you sign up for the service by providing basic personal information, like your name and Social Security number
    1. You must provide your Social Security number for a credit monitoring service to work, since your credit reports are directly tied to your SSN.
  2. Once your account is set up, the system will flag anything that it thinks you should note in your credit report.
    1. 3-in-1 credit monitoring services give you updates on the three reports you have (one from each credit bureau)
  3. You review the information it flags and act accordingly:
    1. If you believe a negative item that the tool flagged is an error or mistake, you go through credit repair.
  4. After the initial review, the service alerts you whenever there’s something new you should note in credit profile. It also notifies you to increases or decrease in your credit score.

Many credit monitoring tools also add other services. Some offer a score estimator that can show you how certain actions will affect your score. For instance, if you plan to get a debt consolidation loan, it will indicate whether that move is good or bad for your credit.

Monitoring services also have features that provide identity theft protect. These tools alert you to potentially fraudulent activity, such as accounts you did not authorize. Some also come with identity theft insurance, which covers out-of-pocket costs related to addressing suspicious activity.

Learn more about how credit monitoring works in certain situations »

How to choose the best credit monitoring service

should i monitor my credit with one credit bureau or all threeThe level of monitoring that you want depends on your needs and goals. Paid credit monitoring services tend to offer more comprehensive coverage. They provide 3 bureau credit monitoring so you can see the reports from all three bureaus with one tool. In addition, they usually give you a certain number of free reviews of your full report per year. This allows you to review your reports more often than the once per year you can do it for free. Some just give you one extra review, some do it quarterly and the most expensive offer it monthly.

The services also differ in which credit score they track. FICO credit score tracking through any third-party tool is rare. You usually must pay FICO directly for FICO score tracking. In most cases, you want to go for a service that tracks VantageScore 3.0. That score tracks the same scoring factors as FICO and has the same range from 300-850. It often provides the best approximation of your FICO score without the added price of paying FICO.

If you don’t want to pay for monitoring, you can use a free credit monitoring service. These come from credit monitoring companies like Credit Sesame and Credit Karma. With these free monitoring services, you usually don’t get your full report. They focus predominantly on just your score. They tell you what items in your report could be contributing to a lower score. Then you can act based on that information. For example, if a free credit monitoring service tells you that you score is low because your credit utilization is too high, you can focus on paying off credit card debt.

Credit bureau monitoring services

Each of the credit bureaus offers its own private credit monitoring service. For instance, you can get TransUnion credit monitoring or Experian credit monitoring. This only tracks information from that bureau’s credit file. They generally also only provide credit score tracking for their proprietary credit score. So, with TransUnion monitoring it would track your TransUnion credit score.

Most people became familiar with monitoring services following the Equifax data breach in 2017. Equifax’s records were compromised for 143 million American consumers. Considering the last census data put the total U.S. population at 323.1 million, this basically meant that over 40% of all consumers were affected.

Equifax’s response to the disaster left something to be desired. They provided a website where you could check if you were a victim. But their social media accounts linked to a fake monitoring site that a security expert set up to show just how lax security was. In addition, the company offered Equifax credit monitoring services, but only free for one year. After that, people would be charged for the service.

Still, this offer begged the question that if Equifax compromised your data in the first place, are they really the right ones to monitor your credit file now? In addition, is it right that you’d end up paying Equifax money for monitoring that they were responsible for you needing in the first place?  It’s a debate that Debt.com’s founder weighed in on just after the breach.

Are third-party credit monitoring tools secure?

Any service that works with your sensitive personal information carries some risk. Your credit file contains your Social Security number, account numbers and other personal information. A third-party credit monitoring company like LifeLock and Debt.com’s own Identity Theft Protection always maintains the highest standard of security measures, because that’s their bread and butter. A breach wouldn’t be good for business, so they take every step possible to ensure your records are kept secure.

Still, that’s not to say that there’s no risk. However, the Equifax breach proved one thing – no matter how careful you are, you can get away from the risk of ID theft. There’s no way to opt out of credit reporting with the credit bureaus. You can’t tell Equifax to stop reporting on you. So, the information is already out there, whether you want it to be or not. This means you’re better off monitoring your credit comprehensively than leaving things to chance. And with 3 in 1 credit monitoring, you get the full picture. This avoids potential theft from falling through the cracks, because you’re using Experian credit monitoring and something happens on your TransUnion credit report.

Decide if you need to monitor one bureau or all three »

Do I need credit monitoring?

This depends on your financial life and goals.

Question 1

Are you an active credit user with several credit accounts and loans?

a) Yes

b) No

Reveal Answer

Credit monitoring becomes more necessary the more you use credit. It’s essential for both credit score tracking and fraud protection.

If you answered yes, then you need credit monitoring services

Return to question

Question 2

Are you actively working to build credit to get a good credit score?

a) Yes

b) No

Reveal Answer

Credit monitoring services allow you to track daily changes in your credit score to see where you stand.

If you answered yes, then you need credit monitoring services

Return to question

Question 3

Do you plan on applying for loans or credit cards within the next year?

a) Yes

b) No

Reveal Answer

A higher credit score means better interest rates and terms on new credit. Monitoring services ensure you have the highest score possible before you apply

If you answered yes, then you need credit monitoring services

Return to question

Question 4

Has your data been compromised recently in a breach?

a) Yes

b) No

Reveal Answer

Credit monitoring services help you see if your information, including Social Security number, is being used to open new accounts in your name.

If you answered yes, then you need credit monitoring services

Return to question

How to compare credit monitoring services

You can use the following checklist to identify the top credit monitoring services to fit your needs:

Does the service offer three bureau credit monitoring?Yes or No
Which credit score does the service track?
Does the service provide free copies of your credit report?Yes or No
If so, how many reports do you get per year?
Does the service come with built-in identity theft protection, such as identity monitoring?Yes or No
Will the service provide identity theft resolution assistance?Yes or No
Does it come with online identity theft protection software, such as an anti-phishing program?Yes or No
Is there any identity theft insurance offered?Yes or No
If so, how much does it cover?
Does the system send suspicious activity alerts?Yes or No
If so, how are they sentText, Email, Both
Is there any Lost Wallet assistance?Yes or No

This checklist will help you narrow down your search for a monitoring service, so you can track the credit score and reports that you want with the added features you need.

Tips for Using Credit Monitoring Services

#1: Be careful with free trials

Find the secrets of your credit score with credit monitoringCredit monitoring services are pretty notorious for “charging you on the down low.” They are the services that offer you a free credit score. To get your score, you have to sign up to get credit monitoring using your credit card information. But the “free” only gets you one score and a free trial period that usually lasts for 30 days. If you don’t cancel the service, they automatically charge your credit card.

Now, there’s nothing wrong with a free trial period. You can use it to make sure you chose the best credit monitoring service for your needs. But you need to go into that trial fully aware of what it is. Otherwise, you can get credit monitoring services you don’t want when you were just trying to get your score.

#2: Don’t worry about affecting your score

Some people think that monitoring your own credit will actually hurt it. It doesn’t. If you use a credit monitoring service with a score tracker, you can check your credit as often as you like. It won’t affect your credit score at all.

#3: Not everything in your credit history is a mistake or fraud

The main goals of credit monitoring are to maximize your credit score and help prevent identity theft. So, monitoring is good for credit repair and identifying fraud. But not everything that’s negative in your credit history falls in those two categories. For example, if you missed a payment by more than 30 days, the creditor reports this information to the credit bureaus. This creates a negative item in your credit report that sticks around for seven years. That’s a legitimate negative item and in most cases, you’re stuck with it until it expires.

So, don’t think that a credit monitoring tool can instantly help you clear out all negative information from your credit report. It can’t. Just like third-party credit repair services can’t magically erase all negative items. Any service that claims to provide the ability to instantly fix your credit is a scam!

#4: Look online for a credit monitoring service review before you sign up

Before you sign up for any service, make sure to check out the provider online. Make sure the company is rated by the Better Business Bureau; they should maintain an A rating or higher. You can also check out reviews on independent third-party review websites. Never believe the testimonials from the company, since they’ll only show you their top credit monitoring reviews.  You can also check things like consumer reports and the rip off report, to make sure you’re not signing up for a scam!

More Questions about Credit Monitoring

Q: Are credit monitoring services worth the money?

A: Most paid credit monitoring services cost around $10-30 per month. More comprehensive services or family plans can cost $40-60 per month, depending on the features. That monthly cost is balanced out by:

  1. Savings on interest charges that you enjoy with a higher credit score.
  2. More chance to catch ID theft early, which limits your liability.

Liability is how much money you’re on the hook for when an account is used fraudulently. If you report a lost or stolen credit card within 30 days, your liability is limited to $50. If you report the fraud any later, you could be on the hook for more. So, catching potential theft early is crucial and not catching it promptly can be costly.

Additionally, lower interest rates make a big difference in the cost of using credit. Interest rates you receive are directly tied to your credit score at the time you apply for a loan. Just a 0.25% difference in APR can equal out to tens of thousands difference in total interest charges. So, if you can find credit monitoring services at an affordable price, it’s usually worth the recurring cost.

Q: Should I sign up for Equifax credit monitoring?

A: If you believe your information was compromised in the 2017 Equifax data breach, then you definitely need a credit monitoring service of some kind. But it’s up to you whether you want to go through Equifax directly or use an independent service.

Q: What credit cards offer credit monitoring?

A: Some credit cards include free credit monitoring as an up-sell feature on your account. The Discover card actually promotes free credit monitoring as a vital benefit of getting an account. Chase also offers monitoring when you open an account with them.

The only problem with credit card monitoring services is that they tend to be highly limited. They almost never offer 3 in 1 credit monitoring. However, in the case of the Discover Credit Scorecard, it gives you a FICO score 8. That’s a specific type of FICO score. They also use TransUniion credit reports. Even Discover clarifies on the Credit Scorecard website that FICO scores can vary based on the report they use.

Of course, free credit monitoring can be extremely beneficial, since it minimizes the cost of knowing your score. If you have one of these cards, it may save you the monthly cost, as long as you’re fine with a basic service.

Q: What banks offer credit monitoring?

A: The answer is lots of them, but you often must pay for the service. Some banks (and credit unions) may offer free monitoring services to premium customers. For example, if you use their top-level checking and savings accounts, then you may get complimentary credit monitoring. But this rarely applies to most checking and savings accounts, especially if you have accounts that offer other features such as no minimum balance requirement.

Bank of America offers an identity theft protection service to some customers. Wells Fargo offers FICO credit score tracking. But again, given how much fraud Wells Fargo has been guilty of over the past few years, it’s a bit like asking the fox to guard your hen house.

Still, check with your financial institution to see if they offer credit monitoring or an identity theft protection service. If it’s only free with some accounts, see if it’s worth upgrading. If not, you may be better off with a third-party service.

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Article last modified on May 1, 2018. Published by Debt.com, LLC . Mobile users may also access the AMP Version: Credit Monitoring - AMP.