Do Credit Monitoring Services Work?

Consumers concerned with the risk of identity theft often ask whether automated credit monitoring services work. The answer to this tricky question depends on the completeness and timeliness of the services provided as well as the effectiveness of consumer responses to the reported changes in the credit reports.

Let’s first establish how credit monitoring services work and what we mean by completeness and timeliness of the credit monitoring services as well as how we can overcome any shortcomings on the part of service providers. When we speak about the completeness of the automated credit monitoring and reporting process, we are referring to the notification of all changes reflected in all of our credit reports. The question we have to ask ourselves as consumers of automated credit monitoring services is whether we are receiving all credit change notifications. Is it possible that the monitoring systems fail to detect and/or report a credit change? The answer is probably yes as we understand the inherent limitation of all systems. The second question we have to ask ourselves is whether credit report changes are detected and reported timely as they appear in the credit reports. The entire credit report change notification process can be compromised if the service provider systems fail to detect all credit report changes and fail to report detected changes on a timely basis. As consumers, we do not have information regarding the credit monitoring service provider system and process performance as well as the sources from which the systems pull the information. For example, how do we know whether the credit monitoring systems obtain credit change information from one source or multiple sources such as all credit reporting agencies? In summary, we have to assume that the completeness and timeliness of the credit change notification process may be adversely impacted by various causes such as system glitches, inadequate processes, and lack of complete sources of information. We can address such potential shortcomings through regular retrieval and review of our credit reports. Learn how to get free credit reports by law.

The second part of this essay in addressing whether credit monitoring services work relates to the responsibilities of consumers. When concerned about identity theft, most people rush to the Internet and sign up with the cheapest or the first identity theft protection company that they come across on the first page of the search engine. The lack of consumer knowledge regarding the service quality of the identity theft protection company as well as consumer responsibilities following receipt of credit change notifications is the second point of failure in the identity theft protection process. Once the service quality of the service provider is assured through referrals, online reviews or direct questioning of the company representatives, consumers can sign up to receive credit change notifications, however, consumer responsibility does not end with the service provider selection. Consumers must follow-up with all credit changes reported by the system to ensure the changes are valid. In most cases, the credit changes reported relate to the consumer activities, however, they still need to be verified. And if a change is not recognized, consumers must promptly follow up with the creditor, credit reporting agency and the identity theft protection company.

From a budget standpoint, if you lack the financial resources to sign up for automated credit change notifications, do not be alarmed because although automated credit change notification is nice to have, it is not required for an effective identity protection. Consumers can download and review their credit reports every few months from one of the credit reporting agencies at no charge to detect unauthorized activities.

If you are not satisfied about how your current or potential credit monitoring services work, monitor your credit reports yourself.

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