Credit Monitoring Service

A credit monitoring service tracks changes in borrower behavior in order to notify consumers of potential fraud, as well as changes to their creditworthiness.

A credit monitoring service tracks a consumer’s credit report and credit scores. Consumers primarily use them to guard against identity theft, where bad actors illegally use another person’s financial or personal information to commit fraud. Criminal activity related to identity theft can range from illegal purchases at retail or online outlets using a stolen credit card number to filing fake Social Security or Medicare claims. Since thieves use this information without the victim’s knowledge, such criminal activity can be difficult to detect until well after the fact, by which time an individual’s credit could be utterly destroyed.

Credit monitoring services notify consumers of changes to their credit activity, such as the establishment of new accounts or the type of hard credit inquiry necessary to make a large purchase, such as a car. Some credit monitoring services also offer more comprehensive tracking of credit scores, keeping consumers up to date on the quality of their credit, allowing them to plan ahead and repair any issues that might inhibit major credit-based activities, such as applying for an automobile loan or a mortgage.

Pricing and features vary from service to service. Some financial institutions offer free services that track credit scores on a limited basis, while other paid services may offer more comprehensive scans across the internet for a consumer’s bank account, credit card or Social Security numbers. When researching credit monitoring services, consumers should take time to understand their limitations. Paid services may offer more comprehensive coverage than free services, but cost does not automatically translate to superior services in all cases. While many services may offer access to a consumer’s credit score, they may not track that score across all providers, for example. Some credit card issuers provide free access to a consumer’s credit scores, making a second paid service that does not offer additional features superfluous.

While credit monitoring services can provide early warning of identify theft or fraud, for the most part they offer protection only after the fact. These services work best as part of a broader strategy to protect and monitor personal information that bad actors could use to commit fraud. In particular, consumers should remain vigilant about the circumstances under which they disseminate important personal information, including Social Security numbers, bank account numbers and credit card numbers. In many cases, simple awareness of social engineering techniques used by criminals to obtain such information can provide substantial protection against identity theft. Checking the accuracy of credit card statements and reliable credit monitoring services offer a useful second line of defense.