How to choose a credit monitoring service
If you want better interest rates and lower car payments you need to get on top of your credit report. There are plenty of credit monitoring services to help you stay on track, but not all of them are worth the cost. The key is finding one that works hard for its customers.
Even if you have good credit, it’s imperative to know what lenders are reporting about you. A 2012 FTC Study for the U.S. Congress showed credit reporting errors are common: 26% contained a mistake! That means one of every four people could be paying higher interest rates because of a clerical error.
Protect Your Credit
The simple solution is to check your credit report for free at AnnualCreditReport.com. It’s comprised of three reporting agencies, and each offers a free report every 12 months. It is the first step towards protecting your credit, but most don’t do it. A 2009 FINRA report on Financial Capability shows less than 40% of Americans saw their credit report or credit score in the year prior.
That’s where a credit monitoring service is beneficial. For a fee, these services let you view credit reports anytime you want, get fraud alerts and lock down private information on the Internet. They can be especially helpful if you have mistakes on your report.
The three reporting agencies, Equifax, Experian and TransUnion all offer monitoring services, but they may not offer the best package for your family. That takes a little research. Beware, there are many companies that simply want your information to sell to marketing groups.
Start with Customer Service
The best companies will not try to trick you into buying their services. They offer plenty of information about their packages online, as well as provide a hotline or online chat representative to answer questions. If an operator starts giving you a hard sell, just hang up.
Avoid any website that won’t give you any information about their products until you hand over personal information. These companies want your name, email address and phone number so they can sell them to marketers. In many cases, they don’t even offer credit monitoring services, they simply push you to other websites and collect a fee. Trial Periods
Most credit monitoring services will let you try out their products for free for 7-days to 30-days. This is a great way to get your free credit report and test out the company’s website. Just tread carefully before you sign up!
Know exactly what day and what time the free trial expires. Some companies time this to the minute and do not staff call centers 24/7, causing you to miss the deadline. Give yourself an extra day just to be certain.
Keep in mind, it’s normal for companies to run an authorization on your credit card to make sure you can cover the first month’s billing. However, consumer website Ripoff Report lists hundreds of examples where companies charged the customer the day they signed up for the free trial, and never reversed it when the service was canceled. In some cases, the charges continued for months despite repeated complaints.
Costs for credit monitoring services range from $10 - $20 a month. To get the advertised rate, expect to pay a full year up front. Read the fine print as some require a year commitment with no refunds if you cancel early.
Family plans are designed to make sure no one is illegally using your children’s social security number or a parent’s medicare. They cost more, but cover all relatives living in your home. Some even cover college students as long as your home is their main address.
To fully understand what you are getting into, read the terms and conditions disclosures. It’s a lot of legal jargon, but you must do it before you sign up for anything, even the free-trial. Some companies have strict billing procedures that charge fees for late payments and make you jump through hoops to cancel service.
Credit monitoring varies, so make sure any company you hire offers these services:
- Credit reports from all three reporting agencies
- Ability to view reports anytime you want
- Alerts to major changes on your credit reports
- Online access to your credit score
- Fraud alerts when your credit has been compromised
- ID theft recovery help to cancel cards and contact agencies
- Public database internet search for unusual activity with your information
- Clear posting of charges and extra fees
- Customer support 7-days a week
- Education about protecting your identity, reducing risk and online security
- Credit monitoring services also offer fee-based products or proprietary services
- Freeze/unfreeze your credit so no one can open a new line of credit in your name
- Software to protect home computers from spyware and phishing scams
- Social media assistance to help you set privacy settings correctly
- Health insurance review to ensure no one else is making a claim on your insurance
- Scan “black market” websites to ensure private information isn’t being bought/sold
- ID Theft risk assessment based on what they can find out about you online
- Simulator to estimate affect new loans or debt settlement will have on credit score
- Progress charts to track changes in credit score
- Look for companies that provide services to remove your name from marketing databases or promise not to sell your information to third-party companies. These are the companies working hardest for your business.
- Some companies promise not to sell your info, but they keep it to sell you other products and services themselves. They even warn you in the fine print to expect emails, phone calls and texts unless you opt out.
- Some companies tell you flat out - they are going to sell your information. What they don’t want you to know is that they will sell it, even if you never actually sign up. If you start to fill out a form online, then cancel before you submit it - they will still keep and sell that information.
Most credit monitoring services offer guarantees if your personal information is stolen. However, the guarantee is usually a limited reimbursement for out-of-pocket costs to freeze accounts and notify agencies. It may not be what you expect, so read the terms and conditions carefully before you sign up.
To find the best credit monitoring service for you, simply remember one thing:
You are the customer!
Any company that stands by its product will go out of its way to impress customers and that means giving you as much information as you want without a hassle or a hard-sell.
A warning about those credit monitoring comparison websites. They are usually affiliated partner sites, which means they make money when you follow their links and buy a product. It also means you may not be getting the whole truth when it comes to the services. As long as you do your homework and read the fine print, you can take the first step in protecting your credit.