Credit Monitoring Services; The Top 5 Myths and Realities you should know about!
Denise Richardson
September 11, 2008
Many people have the impression that credit monitoring services alone will provide a high level of protection against identity theft. That's just a fallacy! It's a myth --and one that often gives consumers a false sense of security.
Let's sort through the most common myths and realities of credit monitoring services;
1. Myth: Credit Monitoring Services will prevent identity theft.
Reality: Most monitoring services simply allow you to occasionally monitor the contents of your credit report. They are reactive, in that they only notify you AFTER a problem has occurred.
2. Myth: Credit Monitoring Services tell you immediately when someone uses your credit card information.
Reality: Credit monitoring services are designed to inform you of any changes to your credit report. This sounds good, but what many don't realize is that the data contained in your credit reports may not be recorded in "real time." Just because an identity thief opens an account in your name today, doesn't mean the creditor will immediately report that account to the credit bureaus.
3. Myth: Purchasing one credit monitoring service allows you to monitor each of your credit reports with Experian, Equifax and TransUnion.
Reality: Not always. Many credit monitoring services only monitor one of the big three credit reporting agencies, and not the other two, which is a problem, since many creditors don't report to all three bureaus. The credit report you are monitoring may not be the credit bureau that a fraudulent account is reported to.
4. Myth: Having a credit monitoring service is much the same as placing fraud alerts.
Reality: No. Credit monitoring services only monitor what is already in your credit report, which you can do for free. You can call the toll free number (877-322-8228) to order your free annual credit reports from each bureau. You can order them all at once--or stagger them and order one every few months.
5. Myth: Once you learn from your credit monitoring service that there's a problem on your credit report, they will fix it.
Reality: NO! A credit monitoring service does not include credit restoration services. If your identity is stolen, you are on your own to clean it up--unless your monitoring service contract expressly states that it includes a recovery of identity service.
Reports of corporate or governmental data losses continue to dominate the headlines and serve as stark reminders we simply can't control whether or not our data lands in the hands of thieves, hackers or even dumpster divers!
Living in a coastal area may be considered paradise, but it has its price and that includes being subject to the wrath of Mother Nature. We all hope and pray that a major hurricane will never wallop our paradise --yet we must prepare as if one will. That's exactly what we need to do when it comes to identity theft--prepare for the worst, hope for the best and take measures to lessen the blow.
There is nothing we can do to 100 percent prevent identity theft, just as there nothing we can do to stop the wrath of Mother Nature. But there are always maneuvers we can take to help lessen the potential impact --but credit monitoring services alone, will not lessen the blow or provide relief. Monitoring services are reactive in nature -not proactive.
If you are considering purchasing services to help relieve the time-consuming burden involved when protecting and/or restoring your identity if compromised or stolen, then consider purchasing services that are proactive. You might want to consider a company such as LifeLock who offers to handle many proactive steps for you, and your children, including but not limited to placing fraud alerts, ordering credit reports, replacing stolen or lost wallet contents and scouring the underground chat rooms where thieves sell and trade data. Additionally, their experts are available 24/7 should a problem occur-unlike the many credit card company fraud departments that close nights, weekends and holidays.
Here are a few steps you can take to monitoring your own credit reports;
Obtain your free credit report from the right place. Amendments to the FCRA and the Fair and Accurate Credit Transaction Act of 2005 designated your right to receive a free annual credit report from each of the three big credit bureaus. You can order your credit reports by calling the toll free number at 877-322-8228 or going to the officially mandated site at annualcreditreport.com. (Be sure to spell it correctly or you will be hijacked to an impostor site.)
Review your credit report and dispute all account inaccuracies on the form that comes with your credit report. Inaccuracies such as inaccurate addresses, erroneous employment notations and mistaken name variations can be an early tip off that someone else has credit co-mingled with yours or that someone else is using your credit. Be attentive to items such as; accounts that were paid timely but indicate they were paid late or reflect an overdue balance and take note of accounts that are more than seven years old and should be removed from your report. Dispute all inaccuracies in writing and send back via certified mail.
Examine your credit card and loan statements. Aside from reviewing current charges applied to your credit card, it is equally important to pay close attention to your interest rates...any rate spike can be a predictor of derogatory credit data contaminating your credit file that will also affect the price interest and insurance premiums. Additionally scrutinize monthly loan statements for errors. Lender errors are common and can be costly if go undetected. Erroneously applied late fees, extra principal payments and escrow discrepancies can be costly.
Knowing what lies within you credit report will help to detect fraud, but it will do nothing to deter it! If your goal is to proactively guard your identity and ensure someone will assist in restoring your identity if stolen, credit monitoring services are not the product you're looking for. Take the time to compare services and then determine which, if any, provide value to you.
Ultimately, if an identity theft occurs, whether caused by a corporate data breach, dumpster diver or a thief who breaks into you home, car, or office and steals you laptop, credit cards or wallet --take it from me, you will be grateful if you have a proactive and restorative plan already in place.
Let's sort through the most common myths and realities of credit monitoring services;
1. Myth: Credit Monitoring Services will prevent identity theft.
Reality: Most monitoring services simply allow you to occasionally monitor the contents of your credit report. They are reactive, in that they only notify you AFTER a problem has occurred.
2. Myth: Credit Monitoring Services tell you immediately when someone uses your credit card information.
Reality: Credit monitoring services are designed to inform you of any changes to your credit report. This sounds good, but what many don't realize is that the data contained in your credit reports may not be recorded in "real time." Just because an identity thief opens an account in your name today, doesn't mean the creditor will immediately report that account to the credit bureaus.
3. Myth: Purchasing one credit monitoring service allows you to monitor each of your credit reports with Experian, Equifax and TransUnion.
Reality: Not always. Many credit monitoring services only monitor one of the big three credit reporting agencies, and not the other two, which is a problem, since many creditors don't report to all three bureaus. The credit report you are monitoring may not be the credit bureau that a fraudulent account is reported to.
4. Myth: Having a credit monitoring service is much the same as placing fraud alerts.
Reality: No. Credit monitoring services only monitor what is already in your credit report, which you can do for free. You can call the toll free number (877-322-8228) to order your free annual credit reports from each bureau. You can order them all at once--or stagger them and order one every few months.
5. Myth: Once you learn from your credit monitoring service that there's a problem on your credit report, they will fix it.
Reality: NO! A credit monitoring service does not include credit restoration services. If your identity is stolen, you are on your own to clean it up--unless your monitoring service contract expressly states that it includes a recovery of identity service.
Reports of corporate or governmental data losses continue to dominate the headlines and serve as stark reminders we simply can't control whether or not our data lands in the hands of thieves, hackers or even dumpster divers!
Living in a coastal area may be considered paradise, but it has its price and that includes being subject to the wrath of Mother Nature. We all hope and pray that a major hurricane will never wallop our paradise --yet we must prepare as if one will. That's exactly what we need to do when it comes to identity theft--prepare for the worst, hope for the best and take measures to lessen the blow.
There is nothing we can do to 100 percent prevent identity theft, just as there nothing we can do to stop the wrath of Mother Nature. But there are always maneuvers we can take to help lessen the potential impact --but credit monitoring services alone, will not lessen the blow or provide relief. Monitoring services are reactive in nature -not proactive.
If you are considering purchasing services to help relieve the time-consuming burden involved when protecting and/or restoring your identity if compromised or stolen, then consider purchasing services that are proactive. You might want to consider a company such as LifeLock who offers to handle many proactive steps for you, and your children, including but not limited to placing fraud alerts, ordering credit reports, replacing stolen or lost wallet contents and scouring the underground chat rooms where thieves sell and trade data. Additionally, their experts are available 24/7 should a problem occur-unlike the many credit card company fraud departments that close nights, weekends and holidays.
Here are a few steps you can take to monitoring your own credit reports;
Obtain your free credit report from the right place. Amendments to the FCRA and the Fair and Accurate Credit Transaction Act of 2005 designated your right to receive a free annual credit report from each of the three big credit bureaus. You can order your credit reports by calling the toll free number at 877-322-8228 or going to the officially mandated site at annualcreditreport.com. (Be sure to spell it correctly or you will be hijacked to an impostor site.)
Review your credit report and dispute all account inaccuracies on the form that comes with your credit report. Inaccuracies such as inaccurate addresses, erroneous employment notations and mistaken name variations can be an early tip off that someone else has credit co-mingled with yours or that someone else is using your credit. Be attentive to items such as; accounts that were paid timely but indicate they were paid late or reflect an overdue balance and take note of accounts that are more than seven years old and should be removed from your report. Dispute all inaccuracies in writing and send back via certified mail.
Examine your credit card and loan statements. Aside from reviewing current charges applied to your credit card, it is equally important to pay close attention to your interest rates...any rate spike can be a predictor of derogatory credit data contaminating your credit file that will also affect the price interest and insurance premiums. Additionally scrutinize monthly loan statements for errors. Lender errors are common and can be costly if go undetected. Erroneously applied late fees, extra principal payments and escrow discrepancies can be costly.
Knowing what lies within you credit report will help to detect fraud, but it will do nothing to deter it! If your goal is to proactively guard your identity and ensure someone will assist in restoring your identity if stolen, credit monitoring services are not the product you're looking for. Take the time to compare services and then determine which, if any, provide value to you.
Ultimately, if an identity theft occurs, whether caused by a corporate data breach, dumpster diver or a thief who breaks into you home, car, or office and steals you laptop, credit cards or wallet --take it from me, you will be grateful if you have a proactive and restorative plan already in place.
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