Credit monitoring services: How do they work?
Authored by a Symantec employee
Credit monitoring services are companies you can pay to keep an eye on your credit files. The services notify you when they see activity in your credit files, so you can determine if that activity is a result of action you took or possibly fraudulent. If someone is using your personal information to open accounts in your name, you could be the victim of identity theft. It happens. Nearly 15 million consumers experienced identity theft in 2017.
How does credit monitoring work?
To understand how credit monitoring works, it helps to understand what a credit file is. A credit file consists of the data a credit reporting agency collects about you and how you’ve used credit. It also contains your identification information, including your full name, current and previous addresses, and Social Security number.
The data in your credit files can change for a number of reasons. It can be helpful to know when changes happen. It can help you know if all’s well with your credit history or if an identity thief is attempting to open an account in your name. Activity that might trigger a credit monitoring alert includes:
- New account openings — including credit cards and loans.
- “Hard” credit inquiries, which occur when financial institutions run credit checks after credit card or loan applications are submitted.
- New public records, including information about bankruptcies and court judgments.
- Address changes related to credit cards and loans.
- Accounts sent to collections for unpaid debts.
The United States has three major credit reporting agencies. Each maintains credit files on most American consumers.
The benefits of credit monitoring are fairly clear. They help you to stay aware of changes to your credit file data. If you subscribed to a credit monitoring service, it would notify you if it spotted any activity on your credit file at — depending on the service provided — one or more of these three credit reporting agencies. Beyond that, credit monitoring may also provide additional services, including access to credit scores and credit reports.
Being aware of credit file activity is one aspect of identity theft protection. But not all kinds of identity theft involve your credit file. Some types, including criminal identity theft, medical identity theft and tax-related identity fraud, do not typically involve a credit check and, thus, wouldn’t necessarily be spotted through credit monitoring.
Companies that offer credit monitoring services
There are a number of companies that provide credit monitoring, including Norton with LifeLock, whose data and device security products and identity theft protection services go beyond credit monitoring alone. Norton and LifeLock, two well-known industry leaders, have teamed up to provide comprehensive protection. Norton Security helps defend against ransomware, viruses, spyware, malware, and other online threats, and LifeLock identity theft protection includes the company’s Million Dollar Protection™ Package†††, a U.S.-based restoration team to help resolve identity theft issues, and Lost Wallet Protection, among other benefits.
Other companies that also provide credit monitoring services include, but are not limited to, the three credit reporting agencies — Equifax, Experian, and TransUnion — as well as CreditKarma and Credit Sesame.
If you’re considering credit monitoring, be sure to understand what you’re getting when you sign up. Free services exist, but they often come with limitations, or may not provide monitoring of all three credit reporting agencies, requiring you to cobble together services from more than one provider to give you the credit monitoring coverage you seek. And again, credit monitoring alone may not protect you against all types of identity theft.
DIY credit monitoring?
It’s possible to monitor your own credit. By law, you’re entitled to a free copy of your credit report from each of the three major credit reporting agencies every 12 months. Go to annualcreditreport.com to learn more. (Make sure you visit this official site, authorized by federal law. An internet search for “free credit reports” will turn up a lot of not-so-free results.)
By requesting one agency’s report every four months, you’ll have regular insight into your credit activity over the course of a year. But remember that you may not be alerted to activity on a credit file in real time — as you would with reputable credit monitoring — only after the fact. So, if something is amiss, you may not know about it until some time later when you request your report.
However you approach credit monitoring, it’s an important part of staying on top of your financial well-being. Much like regularly checking your bank and credit card transactions for unusual activity can help protect you from identity theft, so, too, can monitoring help protect your credit.
Unless you’re depending on a service to do it for you, it’s something you need to remain diligent about. Otherwise, “check credit report” could easily slip to the bottom of your to-do list, possibly leaving you unaware of fraudulent activity that you’d definitely want to know about.
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††† Reimbursement and Expense Compensation, each with limits of up to $1 million for Ultimate Plus, up to $100,000 for Advantage and up to $25,000 for Standard. And up to $1 million for coverage for lawyers and experts if needed, for all plans. Benefits provided by Master Policy issued by United Specialty Insurance Company (State National Insurance Company, for NY State members). Policy terms, conditions and exclusions at: LifeLock.com/legal.
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