Credit card identity theft is on the rise. These services can help you monitor your credit and catch mistakes as early as possible.
Maintaining a good credit history and score matters for helping you qualify for loans or credit cards and land the best interest rates.
If you’re new to using credit monitoring services, these tips can help you understand how it works and which companies are the best.
See related: Business credit monitoring services
What is a credit monitoring service?
A good way to think of credit monitoring services is as a personal watchdog for changes to your credit file.
“Credit monitoring is a service that will detect and track any changes in your borrowing behavior,” says Matt Woodley, founder of CreditInformative.com.
These services can help protect you against potential identity theft if someone opens or attempts to open credit accounts in your name. They can also offer a holistic view of your credit.
“Credit monitoring services can help you rebuild your credit and safeguard your score,” says Howard Dvorkin, CPA and chairman of Debt.com. They can’t fix your score, he says, but they can help you monitor changes and understand what steps you can take to improve your credit.
How credit monitoring services work
Credit monitoring services work in tandem with credit reporting services. Equifax, Experian and TransUnion are the three primary credit reporting bureaus. They collect relevant credit information and use it to generate your credit reports. That information includes:
- Payment history
- Account balances
- Available credit
- Account age
- Inquiries for new credit
- Public records
Generally, credit monitoring services track any changes involving key credit activities, says Richard Best, finance expert at DontPayFull.com. That includes late payments, changes to your credit limit, new accounts or account closures and collections.
When a change to your credit report is detected, you receive an alert notifying you of the nature of the change. Depending on the service you’re using, those alerts may come in real-time or be sent on a daily, weekly or monthly basis.
Woodley says alerts can be particularly helpful in avoiding identity theft. If someone opens a new credit card account in your name, for example, you’d get a notification from the credit monitoring service.
You could then take steps to stop the identity thief, including contacting the credit card company, placing a credit alert on your file or freezing your credit.
See related: Here’s how to cut your identity fraud risk
Pros and cons of credit monitoring services
Credit monitoring services can offer convenience. But more than that, they can be a helpful tool for detecting fraud and managing credit health.
“The biggest advantage of using credit-monitoring services is that it can help in identity theft protection,” says Woodley. “It may not seem like a big deal, but if it happens, it can ruin your credit.”
Reviewing your credit reports one by one can be time-consuming. By the time you spot a change to your credit report, someone may have already racked up thousands of dollars in debt in your name. Credit monitoring services make it easier to take quick action to stop identity theft.
Credit monitoring services can also help you gather all the information you need to make the right decisions about your finances, says Nathalie Noisette, founder of Credit Conversion.
“You can tell if you need to stop using a particular credit card, really look at your payment habits and tell whether you’re trying to acquire too much debt too fast,” she says.
But credit monitoring services aren’t perfect. For example, Noisette says credit monitoring won’t prevent errors from showing up on your credit reports. If a lender incorrectly reports a late payment on one of your accounts, you’d have to dispute that item with the credit bureaus.
Credit monitoring also isn’t a foolproof form of identity theft protection.
“For example, it won’t alert you when someone is using your identity to apply for a job or get a new cellphone,” says Woodley.
And it may only alert you to identity theft after the fact, rather than helping you take preventive action, he noted.
See related: Credit cards that offer free credit scores
Free monitoring services vs. fee-based
Some credit monitoring services are free, while others charge a monthly or annual fee. If you’re debating whether to pay for credit monitoring, it’s important to consider what you’re getting for the money.
“A paid credit monitoring service usually has more perks than free options,” says Dvorkin. “Paid credit monitoring services can offer things like fraud insurance, credit score building plans and help with improving your score.”
A free credit monitoring service, on the other hand, may only offer alerts and an overview of your credit report each month. But you’re not locked in to paying anything for those benefits.
See related: Why did I get charged for my ‘free’ credit report?
Best says determining whether a free or paid service yields more value may come down to how much maintaining a good grip on your credit matters to you. As with any type of service, he says, you usually get what you pay for.
“While you may be able to subscribe for as little as $5 per month, you aren’t likely to receive the level of service that could substantially benefit you,” says Best. “If credit monitoring is truly important, you’d be better off subscribing to a level of service that provides comprehensive coverage of your credit and more frequent reporting.”
Best credit monitoring services for 2020
If you’re looking for a service to monitor your credit, remember to review these factors:
- Any fees you’ll pay monthly or annually for service
- Which credit bureaus the service monitors and whether other monitoring, such as dark web activity, is included
- Whether credit scores are included and, if so, which scores you’re getting
- How often your credit reports are monitored
- Options for receiving alerts
- Added features, such as identity theft insurance or credit error dispute services
Here are our top credit monitoring options for 2020:
|Credit monitoring service||Services provided||Cost||Why it’s good|
|Credit Karma||Credit monitoring of your Equifax and TransUnion credit report; VantageScore 3.0 credit score access||Free||Credit report information is updated weekly, and you can get recommendations on ways to improve your credit|
|Experian IdentityWorks||Identity theft and credit monitoring of your Experian credit file, with the option to monitor all three credit bureaus||Free for 30 days, then $19.99/month ($9.99 for one person) or $29.99/month for Premium ($19.99 for one person)||Experian IdentityWorks offers a comprehensive approach to credit monitoring if you want to protect yourself, your spouse and your children|
|Identity Guard||Comprehensive credit monitoring, including dark web monitoring, for individuals and families||Plans range from $7.50 to $33.33/month||Identity Guard offers the widest range of credit monitoring services with plans for nearly any budget|
|PrivacyGuard||Credit monitoring across the three major credit bureaus, as well as bank monitoring, dark web monitoring and children’s Social Security number monitoring||Plans range from $9.99 to $24.99/month||PrivacyGuard makes it easy to track and monitor all of your credit reports in one place, with comprehensive monitoring of your financial and personal information|
|FICO Advanced||Includes three-bureau credit monitoring, credit alerts and access to 28 FICO credit scores||$29.95/month||FICO Advanced combines credit monitoring with in-depth credit score access for a complete picture of your financial health|
Best free credit monitoring service: Credit Karma
Credit Karma offers free credit monitoring, with no credit card required to sign up. You get credit monitoring for your Equifax and TransUnion credit reports through an easy-to-use dashboard that lets you get a comprehensive view of your credit.
You can also see your Equifax and TransUnion VantageScores. While VantageScores don’t exactly align with FICO credit scores, this can give you an idea of how well you’re doing with managing credit.
Best credit monitoring service for families: Experian IdentityWorks
Experian IdentityWorks allows you to monitor credit history for your entire family in one place. You can enroll in credit monitoring for yourself, your spouse or partner and up to 10 children for a flat fee of $19.99/month ($9.99 for just yourself).
That fee covers credit monitoring for your Experian credit files. If you’d like to monitor your credit reports with Equifax and TransUnion, you can enroll in IdentityWorks Premium, which has a $29.99 monthly fee ($19.99 for just yourself).
Most comprehensive credit monitoring service: Identity Guard
Identity Guard offers both individual and family plans for credit monitoring, starting at $7.50/month. A basic plan includes dark web monitoring and safe web browsing tools. At the premium level, you get those features along with three-bureau credit monitoring, address change monitoring and a monthly TransUnion credit score.
Identity Guard is a good choice for paid credit monitoring if you want complete coverage of your financial life. Your accounts are monitored constantly for changes or suspicious activity and if fraud occurs, you’re covered by a $1 million identity theft insurance policy.
Best for three-bureau credit monitoring service: PrivacyGuard
PrivacyGuard offers triple credit bureau monitoring with prices starting at $9.99, following a 14-day trial period. The TotalProtection plan, which costs $24.99/month, is the most comprehensive option. This plan includes:
- Monthly triple-credit bureau credit score tracking and daily credit monitoring
- Public and dark web scanning
- Driver’s license and passport monitoring
- Bank account monitoring
- Debit and credit card monitoring
- Address and personal information changes
- Children’s Social Security number monitoring
- Online fraud assistance and identity theft insurance
Best credit monitoring service for complete credit score coverage: FICO Advanced
FICO credit scores are the most widely used by lenders. FICO Advanced offers far-reaching access to those scores, along with credit monitoring from all three credit bureaus. For $29.95/month, you get credit monitoring, 24/7 identity monitoring and access to 28 FICO credit scores, including mortgage, auto and credit versions.
You’re also covered by $1 million in identity theft insurance. This could be the best credit monitoring service if you’re focused on improving your FICO score and you don’t mind paying a monthly fee.
Credit monitoring services can help you protect your credit and catch mistakes as soon as possible. With credit card identity theft on the rise, that’s never been more important. Regardless of your budget, you’ll be able to find a credit monitoring service to help protect you and your family.