Identity fraud is one of those scary situations that we hear about a lot. And for good reason. Even though, according to Javelin Strategy & Research, identity fraud fell in 2010, it rose again in 2011. Scary statistics about how fast identity theft is growing as a crime may lead you to decide that credit monitoring is right for you.
But do you really need to pay for credit monitoring services?
If you are willing to take a little time and effort, the answer is probably no.
You Can Monitor Your Own Credit
You can monitor your own credit for free, or for a fairly low cost. First of all, you need to set up a schedule to get access to your credit report regularly. You are entitled to a free report from each of the three major credit bureaus each year. You can set matters up so that you receive a free credit report every four months, planning when you get your free credit report so that you can check on a regular basis.
When you find fraudulent items on your credit report, you can dispute the items, and take other steps to lock down your credit file. Checking your credit report regularly can be a good way to stay on top of things. However, if you go the free route with your credit report, be aware that sometimes all of the information on one report isn’t on another. While checking report every few months can be effective, it isn’t 100% full-proof.
It’s also possible to monitor your credit situation by paying attention to your bank account statements. Many people don’t closely check their credit card and bank account statements, and that’s a mistake. You can catch fraudulent charges by looking over your statement each month. Track your spending (use personal finance software to make this easier) so that you know where your money is going each month. Then, compare your records with your credit card and bank statements. If something is off, it might be an indication that a fraudulent charge has been made. Investigate the matter further to find out if you really are a victim of identity theft.
These measures are all free. If you want to check your credit report a little more often, it’s worth noting that most of the time you can get a 3-in-1 report from one of the bureaus for a reasonable cost. It’s also possible to pay for individual reports for a relatively inexpensive amount. Check each credit report twice a year (again, space out when you check your reports), and you’ll get one report from each bureau for free, and pay a small fee for the other.
The Convenience of Credit Monitoring
The main advantage to paid credit monitoring is the convenience. You pay a monthly fee, and everything is taken care of. Your reports are checked, and sometimes even other public records are checked for signs of ID fraud. You can have reports emailed to you each month, or every time something changes. That way, you don’t have to take the time to look for it.
Decide how much time you would spend to monitor your credit, and compare the costs of a la carte monitoring on your own with a credit monitoring service. Then, decide if it is worth it to you to pay someone else to take care of it.