Credit Monitoring

Are you worried about identify fraud? If you ever use a credit card or have applied for a bank loan, you should be. The question is how worried. Identity fraud is, indeed, a problem. But is it enough of a problem for you to spend hundreds of dollars each year in an attempt to prevent it?

Credit monitoring companies say yes. For around $12 per credit bureau per month, they will monitor your credit reports. The total cost of this service comes to around $432 per year. What you get for that money varies dramatically depending on the company you chose. Some companies will monitor your credit reports on a monthly basis, others quarterly, or even annually.

Checking your credit report is an important part of managing your finances. It can help you spot identity fraud and catch the smallest errors before they become a problem. If you're thinking of applying for a mortgage or buying a car, it helps if you know your credit score beforehand.

So are credit monitoring services worth it?

Credit monitoring services don't do anything that you can't do yourself. You can request a copy of your credit report directly from the credit bureaus (Equifax, Experian and TransUnion). You can get all three of the reports free of charge once a year. After that, you'll have to pay around $8 for each report.

If you check your credit reports on a monthly basis, you'll pay around $264 a year. That's $168 less than what the credit monitoring companies charge. However, if you don't have the time to do it yourself, it may be worth it for you to pay extra to have it done for you.

In contrast, a credit monitoring service that only checks your reports once a month is overcharging you by a massive 500%, compared to what it would cost you to do it yourself. And one that only checks your reports once a year is charging you $432 for something you can get for free.

So if you're thinking of subscribing to a credit monitoring service, make sure you get your money's worth by choosing one that checks your credit report on a monthly basis.