How Important is Credit Monitoring?

Posted by: Gene M. | Dec 28,2007

All of us here at Experts on Credit, I'm sure, are advocates of credit monitoring.  What exactly is monitoring?  It’s either personal or professional.  Personal monitoring is the process of ordering up a free credit report every year, purchasing a report when need be (such as if you’re in the market for a home), and going through your credit card and debit card paperwork every month.  Believe it or not people don’t do this.  They look at the balance on the credit card, see it’s more or less in the ballpark of what they expected and sign a check.  Bad move.  

Professional credit monitoring is basically hiring a service to do all of the above for you.  A credit monitoring service will continually check up on your credit card accounts and make sure there is no fraudulent activity.  The question is, is this really necessary?  Most credit cards have fraud protection built into the card.  You may have gotten a call from your credit card company about charges made on the card.  Perhaps three charges were made in quick succession on the card and the credit card company found this suspicious.  The worst case, and most obvious, is when a charge is made clear across the country at the same time a charge is made elsewhere.

While it’s definitely true that credit cards do have good fraud protection built in, this is not quite the foolproof method of a credit monitoring service.  For one, a credit monitoring service usually offers a guarantee – if your credit rating drops due to a fraudulent charge or there is any type of identity theft, you will be reimbursed or even paid a lump sum.  In addition, credit card fraud protection does not necessarily catch every type of misuse of a card.  Identity thieves don’t always charge $1000 on a card overnight.  In fact, most identity theft schemes charge much less than that, in the realm of $300 or below.  

A charge like that might not be immediately apparent, either to you or your credit card company.  Consider also that most identity theft is local, so it will appear that you are using your card yourself.  Overall, I’d recommend a credit monitoring service in addition to credit card fraud protection because in this day and age it’s better to be safe than sorry.  

Sponsored Resources Ads by Google