Are credit monitoring services worth the prices they charge?
Companies such as Experian, Equifax and Transunion have both free and paid credit monitoring services. The free services aren’t much different than what most credit card issuers provide to their customers. Free services offer the ability to view your score(s), (for example Experian will allow you to see one version of your Experian score), alert you to credit inquiries and alert you when changes to your score take place.
These free services can be extremely useful when you’re trying to get your credit on track or if you’ve previously been a victim of fraudulent activity and you now want to be alerted to any activities that look suspicious.
You can sign up for free and you’ll receive alerts any time a credit check is run (these alerts will come immediately) or if there are changes to you score (this will usually be done on a weekly basis when you score is updated). Services such as Credit Karma and Credit Monkey also offer credit monitoring and repair services for free.
In addition to the free offering these companies provide there are also higher tiered services that you can pay for on a monthly basis. Despite the free offerings being available not all of the information you may want is available for free. With Experian for example you’re able to see your Experian FICO 8 score, your total outstanding debt, your total open credit accounts as well as recent credit inquiries. However you are not given insight into your other scores at the other credit bureaus which can vary, nor can you see other versions of your FICO score such as the scores lenders use to assess your mortgage credit worthiness. Deeper insights into your full credit worthiness can be the difference between buying a home and being shut out of the home buying process.
Credit Karma does offer more information than what you receive from Equifax but even that may not be sufficient information depending on your needs. With Credit Karma you will not have access to your Experian score, but you will have access to your Transunion and Equifax scores as well as a snap shot of your open credit lines and total debt. Credit Karma also provides daily tips that you can use to improve your financial health. They offer things such as credit protection, data breach monitoring (useful for when your information appears in security breaches) as well as debt repayment calculators and mortgage refinance calculators. They do not have a paid tier as the earn money by promoting affiliate offers for credit cards, mortgages, and mortgage refinancing.
So you’re probably wondering why you would pay for a service if you have access to so much information for free and generally are credit monitoring services worth it?
Here’s what Experian’s paid service offers for $24.99 a month.
1. Access to all 3 FICO reports. Not only will you see your Experian score, you will also see your Transunion and Equifax scores updated on a monthly basis.
2. Credit monitoring for all 3 credit bureaus.
3. Daily FICO scores
4. Experian credit lock (useful for if you need to shut down your credit and attempts to open new accounts immediately)
5. Identity protection and alerts
6. Up to 1 million Identity Theft Insurance
7. Lost Wallet Assistance.
I personally do not think that the services they offer are worth the hefty monthly fee for the additional services. Most people will be fine with the free services and the ability to keep an eye on one of your FICO scores on a daily basis. Also, credit cards themselves offer free credit monitoring and the ability to lock your cards if you lose your wallet and want to make sure no one else can use your cards.
Additionally everyone in the United States is entitled to a free credit report from all three credit bureaus each year. I would keep this option open and only use it when I was planning to make a big purchase such as a house or a car. Requesting your report in advance will ensure that you aren’t hit with any surprises when it’s time to make a purchase. You can simply go to www.annualcreditreport.com and request a copy of your credit report from the different agencies.
For now sign up with both Credit Karma and Experian and start keeping an eye on your credit scores. Then when you’re in the planning stages of making a purchase request a copy of your credit report and remove any lingering items that you can.
Enjoyed this article? Check out our other articles
How much money do I need to save before I buy a house?