This is a great debate. There are so many pros and cons. The basic claim of these companies is that they will monitor your credit for you. If you or someone else applies for credit under your name this service is alerted. Some even offer insurance should your identity be stolen.
Some popular services are LifeLock, Identity Guard, Privacy Guard, TrustedID, and Credit Report 123. Each of the credit scoring companies (Equifax, TransUnion, and Experian) also offer such service. Some banks may also offer a similar service to its customers.
How does the service work? They basically monitor inquiries to your credit report and actual applications. A high volume or unusual activity may signal fraud. They will alert you to this activity. They can potentially freeze or block access to your credit until the creditor and/or agency can verify it is in fact you. They also offer you multiple credit reports a year versus the one free one or buying it yourself multiple times a year. Lastly, many offer insurance and assistance should your identity be stole on their watch.
The most important aspect of a credit monitoring service is that it keeps credit history front and center in your financial planning. Your score determines so much about what you will be able to do with money and credit. It’s a cornerstone of all new black chicks’ plans. Having a good credit score saves you money in the long run because it gives you access to lower interest rates. Recall, the lower the risk you are the lower the rate you pay.When interest rates were at an all-time-low, many people couldn’t benefit from it. Even though rates were at 3-4%, a low FICO would be offered 5-6%. However, that’s nothing to sneeze at if you were at a much higher rate before.
In my humble opinion I think it’s part of a good asset protection plan. But I’m not for paying expensive fees to do this. My experience has been neutral. I tried LifeLock. I was relatively pleased with them until they discontinued my account. You know how every few years you get a new credit card. I had auto-renew. Instead of contacting me that the billing information needed to be updated via email, they sent me a letter via snail mail saying my account had been shut off because the billing information was wrong. I went to the website to update my info and I had been shut out. I took no further action. I figured they didn’t want my business if they went to immediately closing my account.
One time I requested a credit freeze with all three agencies following my wallet being stolen. Equifax was extremely difficult to deal with in trying to access my own credit while Experian and TransUnion were very easy. Despite showing up at a creditor with my license and a passport Equifax refused to verify my credit. I called and a person told me I should have changed my phone number before I moved because they use the phone number to verify my identity. A phone number??? They told me to write a letter, which I did. Nothing. I finally, after weeks of this, looked up the company directory and found the highest ranking person in charge of Customer Service and complained. My problem was fixed the next day. A service that was supposed to help became a hindrance.
Judge for yourself. Lynette Khalfani-Cox wrote a great article on this topic a couple of years ago. Despite my experiences so far I’m still on the search for a reliable service that understands good customer service.
I’m just keeping it new.