Sometimes it seems like not a day goes by without hearing about another data breach. Data hackers can hit retail stores, hospitals, even universities at any moment, and your personal information could be affected.
That’s why it’s not surprising to see a rise in credit monitoring services. Especially when it seems like the best way to avoid being victimized by fraud is regularly reviewing our credit reports.
Yet, the question remains if it’s worth paying for credit monitoring services, or if we should just do it ourselves. Read on to find out what’s best for you.
What are credit monitoring services?
The Consumer Financial Protection Bureau (CFPB) describes credit monitoring services as commercial services that:
- Charge you a fee to watch your credit reports.
- Alert you to changes to the accounts listed on your credit report.
- Usually alert you of changes to your accounts by email, text message, or phone.
One way you might have already heard of credit monitoring services is if you’ve been a data breach victim. In order to alleviate the fears of customers after a company endures a data breach, companies that have been hacked may offer victims one year of free credit monitoring.
In fact, the Federal Trade Commission (FTC) recommends it. Here’s what the FTC says in a response guide for businesses who suffer a data breach:
Consider offering at least a year of free credit monitoring or other support such as identity theft protection or identity theft restoration services, particularly if financial information or Social Security numbers were exposed. When such information is exposed, thieves may use it to open new accounts.
The whole point of credit monitoring services is to ensure accounts aren’t being opened in your name by thieves. And while it’s always good to keep a close eye on your credit report for this very reason, it becomes a lot more important when your information has been exposed through a data breach.
In the end, the question isn’t really if you should get credit monitoring; everyone should be working to monitor their credit one way or another. The question is should you pay for it – or can you get it for free?
Can you get free credit monitoring?
There are a few ways to get free credit monitoring, though you might have to mix and match a few of them to get full coverage.
While some services aren’t the same as what a paid credit monitoring service may offer, they can help you achieve the same result: staying on top of the threat of identity theft.
Here are a few ways to do this for free:
- Initial fraud alert
- Extended fraud alert
- Credit freeze
- Free credit monitoring services
- Monitoring your credit yourself
Initial fraud alert
An initial fraud alert is typically used when someone’s information has been exposed in a data breach.
It’s an alert you can have put on your credit file to force creditors to go through additional identity verification steps before extending credit. This alert lasts for 90 days.
Extended fraud alert
An extended fraud alert works the same way as an initial fraud alert, but it lasts for seven years.
The FTC has instructions for placing these types of alerts or a credit freeze on your file. Instructions include contacting each of the three nationwide credit reporting companies – Experian, TransUnion, and Equifax – and asking them to place an extended fraud alert on your credit file.
When you put a credit freeze on your file, you can’t get new credit approved. That’s because a credit freeze completely suspends all creditors from running a credit check. A credit freeze can last as long as you want.
If you want to take out new credit, lift the freeze before you start your application. Then, put it back after you’re approved.
Identity theft victims can do this for free, but others may have to pay a small fee for the service.
Free credit monitoring services
There are many free credit monitoring services, such as Credit Karma and Credit Sesame. But it’s important to note that they don’t all check your credit reports with all three credit reporting agencies.
If you go this route, understand that you may need to do some additional monitoring on your own.
Monitoring your credit yourself
Speaking of monitoring your credit on your own, this is something you can do by checking your credit reports at AnnualCreditReport.com. This site gives you access to your credit reports from all three credit reporting agencies. You can check each one for free annually.
While this won’t give you alerts if someone opens credit in your name the way credit monitoring services would do, it’s a good habit to develop in order to stay on top of your financial security.
Should you pay for credit monitoring?
With all the ways to take advantage of free credit monitoring, does it ever make sense to pay for credit monitoring services?
It all depends on your needs. If you want alerts every time some form of credit is opened in your name or changed on any of your three credit files (one with each credit reporting agency), then you may need to pay for that.
But these services can cost anywhere from $120 to $200 per year, according to Time. So it’s important to think about the cost per year and evaluate your risk of identity theft. Do the two line up?
After all, if you want to prevent new accounts from being opened in your name, a credit freeze is more proactive than credit monitoring. A fraud alert is the next best thing.
But if someone has your credit card number, a credit monitoring service might not catch the purchases the thief makes. Ultimately, you’d have to be reviewing your statements to know.
Another thing to keep in mind is that paying for credit monitoring services may not be worth it if they don’t monitor your credit files from all three credit reporting bureaus. If you’re paying for coverage for only one, you’re not getting as much protection as you could be.
Go with credit monitoring that’s right for you
Before you pay for anything, consider your goals.
Are you looking for alerts when changes come so you can have peace of mind? Credit monitoring services can give you that. Are you looking for ways to prevent identity theft? Perhaps a credit freeze will be more useful.
If you’re worried, you can always do both. But don’t pay for anything unless you understand what you’re getting – and you believe that value is something you need.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.57% – 6.97%1||Undergrad & Graduate|
|2.47% – 6.99%3||Undergrad & Graduate|
|2.68% – 8.77%4||Undergrad & Graduate|
|3.24% – 6.66%2||Undergrad & Graduate|
|2.61% – 7.35%5||Undergrad & Graduate|
|3.01% – 9.75%6||Undergrad & Graduate|