In a nutshell, credit monitoring services track credit account for irregular activities or activities that could reduce credit reputation. These services notify consumers about change in account activities and potential fraud. Credit monitoring services also track credit reports and credit scores. In this case, when a customer exhibits unhealthy credit behavior, the tracking services notifies the customer to take precautions against such behavior. Credit monitoring services have saved people millions of dollars in identity theft cases. Without it, hackers and fraudsters can compromise individual personal information and destroy their access to credit.
A credit watch service is similar to credit monitoring. Credit watch services notify an individual to act before any fraudulent activity occurs on their account by sending red flags. These actions are necessary before harmful activities result in damages to the account. Take an example of Alice, who signed up for a credit monitoring service—SAFE a couple of weeks ago. SAFE will monitor Alice's account on all major credit providers—Experian, TransUnion, and Equifax. Sometime later, Safe notices unusual activities on Alice's account. Let's say, in this case, it was multiple applications for credit cards from different locations. SAFE will immediately notify Alice to file a dispute. When Alice receives this alert, she will contact her credit provider and take further actions to nip the fraudster in the bud. The scenario we just looked at is an example case of how credit monitoring services work.
A Closer Look at Credit Monitoring Services
Most comprehensive credit monitoring services offer fee-based services that promise to protect their customers on a broader scale than free services offers. Their mode of operation includes scans across the internet for a consumer's social security, credit card, or bank account number. Credit monitoring services alert individuals about changes in their account within a business day. Such notifications help users identify or prevent compromise before the attacker can do more damage. One key takeaway, however, is that a paid service does not guarantee efficiency in all cases. Also, credit monitoring services may not be able to track scores across all providers. Credit experts advise consumers to understand identity theft strategies on the internet, rather than rely on credit monitoring services that offer mostly precautionary rather than preventive or remedial anti-theft services. Social engineering techniques such as phishing, where fakes sites steal user information by fronting as legal businesses. Another method often used by scammers in catfishing in which a person creates a false social media identity to defraud an unsuspecting victim. Tailgating is another strategy often frowned upon in the finance industry. It is a situation in which a broker steals a client's information and executes a trade in his favor. Understanding these will help you stay safe on the internet and minimize the risk of fraudulent activities on your account.
Credit monitoring services search for changes in account information of their customers, primarily addresses, names, inquiries, and delinquencies. The primary means of reaching out to a customer is through emails and text messages.
Types of Credit Monitoring
With self-monitoring, a consumer is responsible for the activities on their account. There are several options available for consumers who want to self-monitor their credit reports. The first option is backed by the Fair Credit Act, which mandates bureaus to provide credit reports to consumers once annually. Those who use this approach spread review periods between bureaus. For example, they could request a report from Experian in January, Equifax in June, and TransUnion in December. Self-monitoring is mostly advisable if you live in states that mandate credit-reporting agencies to provide free credit reports. Others buy credit reports for about $10 whenever they want to review. The shortfall of self-monitoring is that you may forget to monitor your account as often as is necessary to prevent fraudulent transactions.
Automated monitoring saves consumers from the hassle of having to check your credit report often in a bit to prevent errors and fraud. These services are mostly subscription-based, and they are more efficient than self-monitoring services. As discussed above, automated services are the ones that notify you via text or email when anything fishing happens to your account. Some of these services provide monthly, quarterly, and annual coverage. They spot about 43% of identity fraud cases and cost you 61% less.
However, you look at it. It is your responsibility to decide and adopt one method to protect yourself from fraudsters. It is now easier than ever to fall prey to hackers in an increasingly globalized world. If you need help or you have any questions about credit monitoring, make sure to send us a mail today.