Is Credit Monitoring Right For Me?

Online, December 16, 2011 (Newswire.com) - It seems like just a few years ago people were mostly blissfully unaware of their credit reports and FICO scores, and credit monitoring was just a twinkle in its mother's eye. But now it seems that everyone has jumped on the credit monitoring bandwagon, offering every kind of protection under the sun.

For a modest fee, you can have one of these services watch your credit report and alert you of any changes to it. But is it worth it? Some think that credit monitoring is nothing more than a protection racket that turns people into "financial hypochondriacs who are afraid of their own financial shadows."

But those in the credit monitoring business disagree, pointing out that when you obtain your credit report, it isn't accurate after only one day, if it is accurate to begin with. Aside from this, a credit monitoring service can alert you almost immediately if you fall victim to identity theft.

Tighter lending by banks and tough economic conditions have made consumers keenly aware of the importance of credit reports and credit scores. The Fair & Accurate Credit Transactions Act, signed into law in 2003, guarantees consumers one free copy of their credit reports each year.

But ordering your free credit report isn't as easy as the commercials make it sound. There are a multitude of Internet sites that automatically sign up applicants for a fee-based credit monitoring service with a seven-day trial period when they request a free credit report. Once the trial period is up, the consumer is billed for the monthly fee, and may not even know it until he receives his credit card bill. It can be tricky to discontinue the service, and it is frustrating, to say the least, when all you wanted was the free credit report you are entitled to.

But the increase in interest in credit scores and credit monitoring is a clear sign that financial literacy among consumers is also increasing. And with that literacy comes the understanding that protecting one's credit is paramount - thus the interest in credit monitoring services.

The most compelling argument for credit monitoring is that no one, no matter how vigilant, can manage to monitor his credit 24 hours a day, seven days a week.

Another key reason is identity theft. Most credit monitoring services offer customers a promise of alerts sent out within 48 hours of new information appearing on credit reports - an indicator of possible identity theft. And it's a well-known fact that the quicker you find out about identity theft, the quicker it can be squashed.

There's no doubt the debate over whether to sign up with a credit monitoring service will continue. But the greater question each consumer must ask himself is this: Is a credit monitoring service right for me?