Credit Monitoring- How does it protect you
from identity theft and what service does it really offer? Part
1 of our series
We have been asked over the past 5 years if Credit
Monitoring is worth having and if we can provide this service.
Credit Monitoring is a huge business and with
scores being so important it will continue to grow. How many
times have you seen promotional offers for the opportunity to get
free monitoring of your credit profile? It is so confusing for
most to even understand their credit reports let alone what the
monitoring services provide and how they can help. The
information given by these services is difficult to decipher and can
sometimes do more to confuse and scare consumers than help them.
I have been studying these services and learning
about them for many years now. The one question I have is how
can finding out you are a victim of identity theft or credit card
fraud protect you? Once you know you are a victim it is already
too late. When you begin to see signs of identity theft on your
credit report the damage has already been done. The signs on
your credit report are the scars of this crime. It is just as
logical as studying for an exam after you fail. Identity theft
is a process and the last result of it is seeing accounts on your
credit report that do not belong to you. These accounts are
usually in default with late payments or have gone to the point of
collection or charge off. If you see accounts that are
not yours on your credit profile but they are in good standing it
probably isn't identity theft. Sometimes if your name is common
or a relative has the same, or similar, name the accounts can be
listed with the wrong person.
Collections- accounts that have not been
paid at all and have been sent by the original creditor to a third
party collection agency or the collection department of the
creditor. Collection agencies are either given (for a limiting
period of time) the debt. If they collect it they earn a
commission if they are not successful in collecting funds from the
debtor it is returned to the original creditor. Some
collection agencies buy the debt from the creditor for a reduced
amount and they become full owner of whatever is collected.
Once you understand this you can also see why they are so aggressive
about getting consumers to make payments.
Charge offs- are when creditors write the
amount the consumer owes, that has been uncollectable, off as a loss
against their profits. This does not mean the consumer no
longer owes the money.
So how can credit monitoring stop identity
theft? The answer is it can't. The only thing credit
monitoring can do in regards to identity theft is to tell you that it
is occurring. Another problem is many consumers buy credit
monitoring because they are too busy to learn about their credit or
just don't want the responsibility of understanding it. They
think that paying a company to monitor their credit will insure them
against any problems. In many cases when the monitoring company
alerts them to a new collection or charge off if they don't recognize
the account they just shrug it off as an error. Many do not
investigate the occurrence until they have a problem getting
financing. The lesson is even when having credit monitoring you
need to understand, at least, the basics of credit to recognize what
is a cause for concern.
We are consistently approached by consumers with
this question "I had an alert from my monitoring company.
What does this mean?". Credit monitoring companies
provide basic updates to you about changes in your credit.
Depending on the company hired and the specific program they offer
will determine how you are updated and what information they will
give you. Some companies only provide you with info about 1
credit reporting agency. Since there are 3 credit reporting
agencies Trans Union, Experian, and Equifax this is just a piece of
the information needed to really monitor your credit profile.
One of the risks you take when hiring a monitoring service, that
provides you with only one report update, is not being able to see if
a collection is reported. Many smaller creditor's like Verizon,
Doctors, Dentists, and Health Clubs don't want to pay the
credit reporting agencies to provide each credit profile with this
collection info since they will have to pay 3 times for this
service. The result is they typically pay one reporting agency
instead of all three and only put the collection on that one credit
report. If you have picked the report that isn't updated you
will not be aware of this problem until all three reports are
pulled.
When a monitoring service only alerts you that a
change has occurred and does not tell you what the details of the
change are we find consumers in a panic. They now know there is
a change but don't have any idea what changed. You can be
updated of an alert when a 3rd party pulls your credit profile if you
are shopping for a car, home, or business loan. You may be
updated with an alert when you open or close an account or have a new
late payment. Alerts come when balances change as well.
If you don't have details on what the alert is you will be in a
continual state of panic. Credit is not stagnant and with so
many changes happening daily these alerts could come many times a
day, weekly, or monthly depending on the activity of your
credit profile. You can see there is much homework to do when
deciding on a monitoring service. If you are highly educated
about your credit and how monitoring services work, monitoring
your credit could be helpful to keep you aware of the
general picture of your credit. If you are uneducated or don't
have the time to keep track of your current credit situation it could
be a source of continual anxiety and frustration.
Education is the key to staying updated on your
credit and its significance to your financial life. There are
other ways to protect yourself against identity theft and credit card
fraud. We will address different methods in this three part
series. Because of the demand for us to provide credit
monitoring to our clients, as a trusted source, we have investigated
how we can offer credit monitoring and if we believe it is a
worthwhile service to the consumer. Since, as you can see,
credit monitoring does not protect against credit problems we have
decided not to offer it but we have created a service we feel is of
great value. We will be offering a program to the consumer that
provides 2 full in-depth credit analysis' annually. This will
include a full education from a live credit expert on all aspects of
each consumers individual credit profile and updates throughout the
year on changes to watch for in regards to credit and the scoring
systems (usually bi-weekly). We will also provide updates on
each credit profile that will stop credit being opened in their name
without their direct permission. We will provide you with the details
at the end of this series about this service. If you have
questions now you can call us and we will be happy to answer
them. Stay tuned for next week's article.
I have listed some of the monitoring services
available below. You will find a description of the services
they offer, pricing, and what our experience was when trying to speak
with a live representative.
Equifax offers
-Equifax 3 in 1 credit watch
gold monitoring- only unlimited access to Equifax reports but
updates on all three- $14.95 a month . Alerts from all 3
reporting agencies about basic changes. Can't see all three
reports or get Fico scores for any but Equifax. Annually
$179.40.
-Score Watch- Tells you your Equifax fico
score every time there is a change and what the change is score
wise. No other credit report updates or scores $12.95 a month
or $155.40 annually.
-3 in 1 monitoring plus 4
Fico Scores- You can only get your fico score as it relates to
Equifax 4x's a subscription (or annually).
You will be monitored for all three reports but
you cannot see your full report. You can only get alerts of
changes. $14.95 per month $179.40 annually.
When speaking with a rep from Equifax about the
above 3 score monitoring programs we found they were reading from a
script and very confused about what the products were and what scores
you received.
Free Credit Report
Triple Advantage- Daily Monitoring of all 3
reports, alert notifications when key changes occur. You get
bi-monthly monitoring of your Experian Score (NOT FICO). Just give you an alert but no
details of what happened to cause the alert. Monthly statement
with credit score from Experian only and plus scores for all 3
reports. $14.95 a month or $179.40 a year.
When I called to speak with a rep and find out
what else they offered the rep was totally confused. I found
she didn't even know what credit scores they offered and when I asked
for a supervisor there were none available and she got so nervous she
told me she needed to take another call and hung up on me. This
was my worst experience with a rep.
Identity Guard Programs
Watchful Eye- reports, scores only for
Equifax and general alerts. Quarterly credit updates and
internet surveillance. Internet surveillance means if someone
googles your name and information you will be alerted.
$9.99 a month or $119.88 annually.
Extra caution- Reports, scores, and
general alerts for all 3 reports. Quarterly credit updates for
the full picture of all 3 reporting agencies. Three bureau
monitoring and internet surveillance. 14.99 a month or $179.88
annually.
Total Protection- Credit reports, scores, and
general alerts for all 3 reports. Quarterly credit updates for
the full picture of all 3 reporting agencies. Three bureau
monitoring and internet surveillance 14.99 a month or $179.88
annually.
Reps seemed to be knowledgeable and interested in
helping.
True Credit
3 bureau credit monitoring- 24 hour alerts of
changes to all 3 reports. The ability to lock and unlock your
trans union credit report. I don't understand how locking only
1 report can help you. Locking credit could cause much
frustration when you are going for a loan. If a third party
(like a mortgage company) wants to qualify you for a loan they will
not be able to see your Trans Union score which could stop the
process from going through. You can get a new full view of your
3 credit reports once every 30 days. If you close or open
accounts, make payments, or get inquiries you will be alerted.
I tried to chat live but realized it was just a computer
spewing out info and not answering any specific questions I
had. I spoke to a rep on the phone who seemed somewhat
knowledgeable and it was not difficult to get through to make contact
with him. This was $14.99 a month or $179.88 annually
Trans Union- credit monitoring $11.95 a
month or $143.40 annually. It is exactly the same as above but
only for the trans union report.
Fico Products
Score Watch- daily monitoring of
just Equifax and weekly monitoring of the Equifax Fico Score $8.95
monthly and annually 99.95.
Fico Quarterly Monitoring- tracks and provides
monitoring and Fico Score for Trans Union 4 times a year. $4.95
monthly and annually 49.95.
Reps were somewhat knowledgeable and helpful.
There are many more monitoring services out there
but they all seem to be relatively the same and charge varying
amounts so we felt it would be redundant to list them all.
Stay tuned for more credit info!
Feel free to call us if you have any questions!
