Credit Monitoring: Is It Worth It?

Online, November 3, 2011 (Newswire.com) - In the past couple of years, it has become more commonplace to see headlines about data breaches. Breaches have occurred at large and small corporations, at banks and gaming companies. Because of this, signing up for a credit monitoring service is probably something you've given thought to.

The cost of, on average, $12 a month for this type of service seems like such a small price to pay in order to maintain peace of mind and will protect you from identity theft. Not so, says some experts.

Some say this type of service is a complete waste of money for most consumers. Paul Stephens, director of policy and advocacy at the Privacy Rights Clearinghouse, says credit monitoring services don't do anything that a consumer can't do for himself.

But despite the criticism, 33 million people used this type of service last year, and usage is expected to continue to grow.

The fact is that credit monitoring services can't protect you from identity theft. Some services only track one of the three credit bureaus, and if a lender gets your credit report from one of the other two, you won't know about it until the loan has been granted. And by that time, the damage is done. Even if the service monitors all three credit bureaus, it's likely you'll have to call the bureau to find out if there has been any questionable activity - they won't call you.

But proponents of this type of monitoring say that those who see credit monitoring only as an identity theft deterrent are missing the point -it's a tool that consumers can use to proactively manage their credit.

Another criticism of credit monitoring is that if you do become a victim of identity theft, the insurance you thought you were getting will only cover the costs associated with cleaning up your credit after the identity theft occurs. The policies do not cover the monetary losses you incur if a thief cleans out your bank account.

You may have signed up for a credit monitoring service and aren't even aware of it. Many credit cards, upon activation, or rewards, once cashed, sign up the consumer for credit monitoring service, and the consumer may not know about until they are charged for the service.

Regardless of what you may think about this type of service, there are those that are worth the money. You just have to do your homework, read the fine print, and know exactly what you're getting. No service will prevent identity theft - but there are those out there which can certainly help signal an attempt by a would-be thief. And that is worth 12 bucks a month.