What Actually Credit Monitoring Services Offer and What Not?

Last Update: February 12, 2021 Credit Report Identity Theft

Today, many people react to economic deterioration by either excluding or reducing the reckless spending of non-refundable revenue and reviewing their finances. In most cases, those with average income focus on how they will cater to their daily needs and faithfully settle their monthly bills right on time to not ruin their own credit standing.

According to data released by the Federal Trade Commission, about 10 million customers are in one way or another effect by identity theft every year. As a matter of fact, today, this is the fastest growing crime in the U.S. .

Credit monitoring services were conceived as a result of the increasing cases of financial fraud and ID theft. Initially, the three credit reporting agencies were the first to offer this kind of service to the consumers. After which, many more credit monitoring companies started. But you must be very vigilant since some are reputable while others are not.

You probably have come across several arguments for and against credit monitoring. If not, then I will advise you to read about two or three blogs or even Google “credit monitoring,” and you will come across numerous articles saying that services of credit monitoring are scams and the protection they offer is not worth the amount of cash you are required to pay. Meaning that they are not effective in making sure your identity is safe. Then, on the other hand, you will read testimonies of people saying that they have once been victims of ID theft and that credit monitoring can actually go a long way in making sure your identity is protected all the time.

So, which side is the truth? Continue reading, and I will reveal to you the truth. I am confident that the main question lingering in your mind right now is whether credit monitoring is a scam or not.

Credit Monitoring – Is it a Scam?

It certainly would be reassuring to know that when we look for a business service to help meet a need, whether through the television, print media, or the Internet, we could trust that service to treat us loyally. The reality is that there are many fraudulent businesses out there that don’t have the best intentions and claim to provide certain benefits to the consumer that they do not or cannot follow through on.

Unfortunately, some of these businesses are credit monitoring services. A common scam perpetrated by credit monitoring services is to lure you into trying their service on a 30-day trial basis, and for doing so, you can receive a free credit report. Once you agree to the trial period, you will get a free credit report. But then you end up getting charged for the service anyway, despite the claim that you will not get charged if you cancel before the trial period is up. One of the 3 major credit bureaus was found guilty of this.

Also, some credit monitoring services claim that they can prevent identity theft. This is not the case. Preventing identity theft requires much more protection than a credit monitoring service alone can provide. In fact, there is no full-proof identity theft prevention unless you place a freeze on your credit report from all 3 credit bureaus; Experian, Equifax, and TransUnion. The credit freeze prohibits anyone from creating new accounts in your name or accessing established accounts to steal your money.

All of that being said, it still doesn’t prove that all credit monitoring services are fraudulent or that they don’t provide a reputable service. Many credit monitoring services are credible and have been approved by the Better Business Bureau (BBB).

One example is Identity Guard. Identity Guard’s Total Protection package has been rated one of the most comprehensive service packages offered. For approximately $15 monthly, Total Protection offers a free 30-day trial, 3-bureau monitoring (monitoring by Equifax, Experian, and TransUnion), and free quarterly reports from all 3 credit bureaus plus daily credit alerts and $20,000 of identity theft insurance.

Another favorite is Equifax Credit Watch Gold with Score Power, also accredited by the BBB. Equifax Score Power offers roughly the same benefits as Identity Guard’s Total Protection, the only differences being that Equifax Score Power offers unlimited access to your FICO score and credit report but from Equifax only AND an initial 3-in-1 credit report, which lays out a side by side comparison of the 3 credit bureau reports.

Of course, numerous other credit monitoring services are worthy of our trust. When you choose a credit monitoring service, the most important thing is to be sure that they meet the Better Business Bureau’s standards. Also, know that if you choose to go with credit monitoring services and don’t like them, there is a place you can go and file an official complaint.

Why Exactly Should a Consumer Go for Credit Monitoring Services? 

I know most of you must now be wondering why it is very important for a consumer always to seek credit monitoring services. Continue reading and understanding more.

Typically credit reports are created by speaking to one of the major credit monitoring companies and putting up an account with the ability to relay every information about your credit report quickly. TransUnion, Experian, and Equifax are the three companies we are talking about.

As a consumer, it is possible that you can get three distinctive credit reports thanks to the three credit monitoring companies. Without a doubt, these reports may turn out to carry the same information, but if you check clearly, you will notice that one of them contains pieces and bits that are not in the public domain. If you really want to increase your credit score, then an annual check from the three main bureaus is a must.

To further elaborate, many different parts are making up a credit report. The first part is usually the consumer info, which entails the name, address, employer, and birth date. Another is your account’s history, dating back from the time of opening it to the time you might have applied for a loan or even taken one.

Here, you will agree with me. The creditor’s information is one of the most overlooked parts of a credit report. With information about your credit report from either of the credit companies, you will be able to know the right information required to speak or even get hold of a certified creditor, or in other situations, the creditor who is already managing your loans and accounts.

The main reason why every employed or self-employed person needs a credit report is to allow him or her to know how you have been managing your current and past loans or even any other financial debt you may be having. With a credit report, you will be in a position to tell whether your identity has been stolen or if someone is using your name to acquire loans.

How lenders use credit report information? Certain information, for example, your previous loan repayments, will allow the lender to judge whether you are a responsible borrower who always pays in time. Other things in your credit report will inform the lender of your track record regarding managing finances.

As a former borrower, if you wish to see that your credit is secure all the time, then it’s wise to go for credit monitoring services. You will get extra benefits from seeking credit monitoring services, such as the 3 in 1 report provided by several services online. You will also have the ability to check your own credit score at once from all the major credit monitoring service providers. Additionally, you will be updated in case of any changes made to your credit score in the shortest span possible within a week.

The number one reason for having your credit monitored is to ensure you are safe from identity theft. ID theft means that someone might be easy using your personal details to illegally applying for loans or using other means to add debt to your personal account. With credit monitoring, you are sure of getting immediate alerts if any extra charges are added to your credit report. This will allow you to deal with them instantly.

However, you can also monitor your credit report by simply requesting all three credit monitoring companies. I am sure this sounds familiar, right? With this technique, a consumer can evenly spread the requests throughout the year instead of requesting all the reports at once. Meaning that you can order your credit report after every 4 months. The best thing about this method is that you can easily sidestep credit monitoring services.

Even though it offers you a relatively good methodology of trailing your credit score, credit monitoring services don’t offer you the simple tricks and tips on how you can prevent ID theft apart from providing alerts. The most important bit of common sense that each person should depend on is making sure all inactive accounts with lenders or even banks are closed. This can go a long way in making sure that the risk of your identity being stolen is low.

To finish, an ideal credit monitoring service will make sure insurance against unexpected debts or loans whilst your identity was filched is included. Meaning that your credit monitoring service should offer you insurance that is equal to between 10-40 thousand dollars against ID theft. This is certainly much more than just a bonus concerning observing your credit!

Credit vs. FICO Score

I know you really wish that it was possible to actually pay cash for every single goods and service you get, but no, this is not the case. It is not even possible. Once the flow of liquid cash becomes low, it becomes necessary to seek other methods of paying for the services and goods being offered. And this is certainly where credit plays its role.

When you have little cash to settle your bill, you will be forced to look for a lending source to assist you in completing the transaction. Basically, this is where the line between credit and FICO score is clearly revealed.

The relationship between the two can either be harmful or helpful, mainly depending on the situation. If you understand the relationship between the two (credit and FICO score), you will quickly understand why.

Lenders can’t give funds to anyone who may not be in a position to pay back money issued to them. This is because they will be risking turning their businesses bankrupt. Instead of dealing with such a possibly ruinous situation, it will be wise and much safer to lend those that possess a decent track record of settling their debts. Here is where a demonstration of the relationship between FICO and credit score is apparent.

FICO credit score shows your payment history and your feasibility as a borrower. This is the most vital credit score issued by the majority of the credit agencies. About 75% of lenders prefer to use a FICO credit score statement before making a decision.

However, this does not mean that there is anything wrong with the other scores. Most lenders will overlook them. They will instead capitalize their effort and time sorting through the score given out by FICO.

Intrinsically, with a perfect credit report and score, you will notice that your potential and process of getting credit is almost effortless compared to others that have low credit scores. This is exactly how the loaning business works. Definitely, nobody will be able to loan anyone that is evidently a bad loaning prospect.

So, if your credit score is way below the average, make sure that you do everything possible to increase it. Well, this may prove to be somehow difficult, but in the end, it’s worthwhile.