6 Things You Must Know About Credit Monitoring

1. No service is bulletproof.

After the massive Target data breach in 2013, for example, customers were offered ProtectMyID, an Experian-owned service that provided daily credit monitoring, fraud insurance and personal assistance from a fraud resolution agent. Still, it didn’t monitor reports from the other two credit bureaus, TransUnion and Equifax. Plus, credit-monitoring services notify you only after someone has opened an account in your name, says Brian Krebs, a cybersecurity expert who blogs at KrebsonSecurity.com. “These companies will help you clean up the mess, but it may involve a lot of your time,” he says.

2. Your privacy should be protected.

A service may need to share some data with third parties to resolve fraud problems or complete other tasks, but it should never sell your personal information. Look for a clear explanation of the service’s privacy policy on its Web site.

3. It’s not free forever.

Most coverage expires after a year or two. Ask the provider what happens if a problem isn’t resolved before then. Make sure the service won’t charge you without first obtaining your consent—and make doubly sure you understand how much the service will cost. Credit monitoring averages $120 to $300 a year. For example, Experian charges $19.95 a month (after a $4.95 introductory month) for its Credit Tracker service.

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4. Take charge at no charge.

Start by requesting a free credit report from www.annualcreditreport.com. If you see any red flags, you can put a fraud alert on your credit reports every 90 days, which requires creditors to verify your identity before extending credit. (You have to notify only one of the three credit bureaus; it will contact the other two.) A fraud alert also entitles you to a free copy of all three reports at once. In addition, you can get free updates on your Experian report from Credit Sesame. Credit Karma, another free service, will monitor your TransUnion report.

5. Bring out the big guns.

If you’re really concerned about ID theft, a credit freeze will prevent creditors from pulling your reports, making it nearly impossible for someone to open a new account in your name. (It won’t, however, affect your existing loans or lines of credit.) Some states let you freeze your credit free; others charge up to $15 per credit bureau. Most states will waive the fees for ID-theft victims who have filed a police report. To request a freeze, contact each of the major credit bureaus. The bureaus will issue you a personal ID number to “unfreeze” your reports; depending on the state, you may have to pay an additional fee of $5 to $10.

6. Don’t let your guard down.

You know the drill: Make sure your passwords are difficult for hackers to crack, update your virus-protection software, be on the lookout for “phishing” e-mails and monitor your financial accounts. Costis Toregas, associate director of the Cyber Security Policy and Research Institute at George Washington University, checks his bank account online every morning. Says Toregas: “If someone takes money from my account, I want to be the first to know.”