Should You Hire a Service to Monitor Your Credit File?
The Federal Trade Commission claims almost 10 million Americans were victims of identify theft in a one year period of time.
The advice to check your credit file once or twice a year is distributed by many consumer groups. Those who have been through the frustration and fear of identity theft say that's not enough.
If can take up to one year for an average person to learn he is a victim of ID theft. By the time you receive an annual free credit report, the damage to your credit file could be extensive.
Timing is important as fully two-thirds of identity theft victims who notice the problem less than five months after it begins will not lose money.
The longer the identity theft is allowed to continue, the great chance there is that the theft will cost you cash as well as time.
Can't Stop Identity Theft
A service for credit monitoring will not stop identity theft but is designed to check your credit on a weekly or even daily basis. You are notified of any changes and that is the benefit of such a service.
You don't have to worry about checking your credit or request a credit report month after month because the monitoring service is checking it for you.
The major credit reporting bureaus offer credit monitoring for a fee. However, they only check their own information. If the area where the person stealing your identity uses a different reporting agencies, you may not know about it until it becomes a problem across your entire credit history.
If you are going to pay for a monitoring service you would be wise to choose from those who offer to monitor all three credit rating agencies.
You will be asked for a significant amount of information when signing up for this kind of service. This surprises some people as they are accustomed to giving name and address or just an email address when buying a service.
The first thing the monitoring service does is verify you are exactly who you say you are. The information requested is to protect you and your privacy (and your financial health) so answer the questions fully and honestly.
Hiring (Or Not) is a Personal Decision
The decision to use a service to monitor your credit file is a personal one. Many financial experts advise hiring someone to monitor your file is neither necessary nor useful.
It's understandable that many take than stance as the leading proponent for credit monitoring are the credit bureaus themselves. When you consider they offer their own paid service for this purpose, you understand why their motives might be self serving.
The marketing strategy for selling credit monitoring is fear. It's interesting that the advertising is targeted not to the entire credit using public but mainly to those who have suffered from identity theft in the past.
Studies have shown those who have been victimized are more willing to buy anything that promises they won't be victims again in the future.
The FTC Do Not Recommend This Type of Service
The FTC and many consumer groups do not advocate the use of a service to monitor your credit file. They point out the limitations which you might not think about before purchasing.
1. There is no protection against theft of your Social Security number - New accounts opened are not always reported quickly to credit bureaus and the bureaus themselves have been widely criticized for their easy acceptance of accounts opened when the social security number matches even if address and other information is different.
2. Gaps can leave you feeling protected yet in reality you may be exposed - Monitoring services may only watch one credit bureau and provide incomplete coverage. You may think that the bureaus share information with each other and that is the way it is supposed to work. However, it often isn't done.
3. ID theft insurance may be worthless to you - Look closely at the fine print that explains what is covered. Many services exclude losses that occur before you purchased the monitoring service and yet the fraud may have occurred well before that as it can take months for ID theft to be detected.
If you are one who doesn't bother with checking your credit file on a regular basis you might choose a service to regularly monitor your credit file.
If you do, be sure to look closely at the terms to make sure there is a true benefit for you in exchange for the fees you will pay.