How Best to Monitor Your Credit

People often ask me if I think it's worth it to get sucscribe to a credit monitoring service. In my opinion, credit monitoring services that make you pay a monthly service fee aren't worth the price. 


First, I'm not aware of any credit monitoring that prevents identity theft. Instead, the services tell you when an account is opened in your name, which, at best, alerts you that your information has been stolen.


Second, the services they provide are things you can do for yourself at a substantially lower cost. For example, each of the Big Three credit bureaus (Equifax, Experian, and TransUnion) are required to provide you with a copy of all the information about you in their file once per year for free. Visit www.annualcreditreport.com to request online or obtain a mail-order request form. I usually suggest that people stagger their requests and obtain one every four months to monitor for new accounts.


Also, even though it's highly imperfect, I do think there is value in signing up for Credit Karma. Credit Karma is a service that let's you see the contents of some of your credit reports for free and will also alert you when a new account or inquiry appears in your credit file. In my experience, the information isn't always perfectly correct or up-to-date, but in exchange for marketing credit card offers, Credit Karma lets you see your credit information for free.


To make a long story short, if you want constant, up to the minute access to the information on your credit reports and price is no objective, go ahead and sign up for a credit monitoring service. However, the steps outlined above are the ones I follow and are what I recommend to friends, family, and clients.