With stories of identity theft surfacing daily, it’s no wonder that consumers want to be able to keep an eye on their credit reports from Experian, TransUnion, and Equifax.
But there can be a hidden problem with these credit monitoring services. Each time your credit is checked by a third party, it lowers your credit score a little. If you personally check your credit, there is no impact.
The problem is that some of these credit monitoring services allow you to check your credit daily, and they count as a third party check. That means every time you check your credit, you’re lowering your credit score.
What’s the alternative? Consumers can get one free credit report on themselves from each of the credit agencies each year under the Fair Credit Reporting Act. Use annualcreditreport.com to get your credit report instead of a “monitoring service.” Spread those three requests out throughout the year so that you can check on your credit regularly.
And don’t be fooled by paid credit report monitoring services. Some try to appear as if they are the free reports offered under the law, but they are not. Their goal is to sell you services by offering you something free as a teaser. The one that trips up consumers most often is freecreditreport.com.
Most of the main benefits of credit monitoring services can be done for free by each individual. You mentioned the free annual credit report but consumers can also opt out of all unsolicited credit offers for no charge by contacting all 3 agencies. I haven’t received a credit card offer in 3 years or so.
Consumers can also initiate a fraud alert for free by contacting each credit agency. This will probably result in being contacted anytime someone runs a credit report on you.
A little more draconian, and only available in states who have passed legislation to allow it, is the option to lock your credit report. This works well for people who either don’t need any new credit or only need it occasionally. Essentially, no one can run a credit report on you except yourself. That virtually eliminates any possible id theft. It is possible to either temporarily or permanently lift the lock. I believe there is a nominal charge ($10 or so), but it’s a lot cheaper than paying a monthly service charge.
Check the web sites of the 3 agencies for details.
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