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Should You Get Credit Monitoring?

You may be eligible for free monitoring of your credit files if you were caught in a large data breach. Here's what to know about keeping your credit safe.
July 30, 2019
Credit Score, Personal Finance
identity theft credit monitoring
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Many consumers will be eligible for free credit monitoring, thanks to high-profile data breaches.

A legal settlement of the 2017 Equifax data breach that affected more than 147 million U.S. consumers provides four years of free credit monitoring at all three credit bureaus.

Meanwhile, Capital One has said it will offer free monitoring after a breach compromised the personal information of approximately 100 million U.S. consumers and 6 million consumers in Canada.

If you are not eligible for these free offers but breaches like this have you worried, you could purchase monitoring.

But for everyone, the wisest course is to go beyond monitoring for signs of trouble and proactively defend your credit by freezing it.

I’m eligible. Should I take the free monitoring?

If your data has been compromised, it doesn’t necessarily mean your information has been used by identity thieves. You do, however, face a lifelong risk of identity theft because your data and numbers are out there. Your best protection is freezing your credit; layering on free monitoring could help.

Credit monitoring watches your credit reports so you’ll be alerted to changes in them. If someone tries to use your data to open a credit account, you will know right away rather than months or years later, when there is more damage and undoing it is more complicated.

Capital One says it will “notify affected individuals through a variety of channels.” Look for details about the free credit monitoring and identity protection service it has promised.

Check the Equifax settlement website to see if you were affected. You have until Jan. 22, 2020, to accept, and monitoring will start soon after the court gives final approval of the settlement. If you already have credit monitoring and don’t want to take the monitoring, you can instead opt for a cash payment. It’s capped at $125, but it’s highly likely most people will get much less.

I’m not eligible for free monitoring. What should I do?

You can purchase monitoring if you choose to. Many credit monitoring companies charge monthly fees that can be upward of $30. Before signing up, review what services it includes, when and how you can cancel, and what your rights are if the service doesn’t protect you.

Be aware that you can do most credit monitoring services on your own for free. Here’s how to protect yourself:

  • Get a credit freeze, which experts consider the strongest protection from criminals accessing your credit without permission.
  • Check the detailed information on your credit reports. Federal law entitles you to a free annual credit report from each of the three major credit reporting agencies — Equifax, Experian and TransUnion. In addition, the Equifax settlement entitles all U.S. consumers to an additional six credit reports annually from Equifax. If you find an error on any report, dispute it.
  • Sign up for a service from a personal finance website or your credit card company that offers free credit scores. Look for one, such as NerdWallet, that also offers free credit report information so you can watch for fluctuations in your score and report.

Know where your credit stands

Check your credit report for free and see your free score, too. Your info updates every week to help you track changes.

If you decide to pay for monitoring

Maybe you know you won’t follow through on do-it-yourself monitoring or are willing to pay for extra protection. If so, look for an identity theft protection product that offers both credit monitoring and a full suite of theft alerts.

The cost makes sense if:

  • You’re already the victim of identity theft or at high risk of it, for instance, if your Social Security number already has been disclosed in a data breach or you’ve lost your Social Security card.
  • You don’t want to freeze your credit reports.
  • You know that you won’t monitor or freeze your credit.

Look for a service that covers all three credit bureaus, not just one — otherwise, you’d be paying for partial coverage.

NerdWallet recommends avoiding such offerings from credit bureaus. They may not offer much identity theft coverage and may have an arbitration clause limiting your rights if the bureau is the source of a data breach.

Be on guard for things monitoring can’t stop

Credit monitoring services often market themselves as safeguards of your credit profile. But that’s not quite the case.

Here’s what credit monitoring companies can’t do:

  • They can’t prevent identity theft or credit card fraud.
  • They can’t keep you from receiving phishing emails — or from opening them.
  • They can’t keep someone from applying for credit in your name.
  • They won’t correct errors on your credit report.
  • They won’t stop taxpayer identity theft.

» MORE: See if you need identity theft protection services

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