Like HowStuffWorks on Facebook!

How Credit Monitoring Works


Other Ways to Monitor Your Credit
Since most identity theft is really credit card theft, check your credit card statements regularly for unauthorized purchases.
Since most identity theft is really credit card theft, check your credit card statements regularly for unauthorized purchases.
LDProd/iStock/Thinkstock

Credit monitoring services are worth the price in specific situations. As we mentioned, victims of identity theft would definitely benefit from credit monitoring to make sure that thieves don't try to open accounts in their name or reroute existing accounts to a new address. But for the average consumer, it's possible to protect your credit and your identity using freely available online tools.

For starters, take advantage of the three free credit reports offered through AnnualCreditReport.com. Instead of ordering all three at once, send away for one every four months [source: Weston]. You won't get a complete picture each time — remember, not all creditors report to every agency — but it will give you three free chances to spot potential issues.

Since the vast majority of "identity theft" is really credit card theft, check your credit card statements regularly for unauthorized purchases. Contact the credit card company immediately if you suspect that your card number has been compromised. You should also sign up for online access to your bank account and self-monitor your account balances for unexpected debits or transfers.

If you are the victim of identity theft, or suspect foul play, you can contact any one of the three credit reporting agencies and ask for a 90-day fraud alert on all of your accounts (each agency is required by law to notify the other two). The fraud alert is free and prevents anyone from opening a new credit account without calling you and confirming the transaction [source: FTC].

If that's not enough, you can further tighten your credit security by issuing a credit freeze on your accounts. A credit freeze is like a lockdown on your credit report. You can still request free annual copies of the report and do things like apply for a job or a mortgage, but lenders can't access the report unless you temporarily lift the freeze [source: FTC]. Unlike fraud alerts, credit freezes are not always free, depending on where you live.

If you really want to see your credit score (not included in the free report from AnnualCreditReport.com), you can buy it at myFICO.com for $14.95, but read the fine print. Your purchase, of course, will automatically sign you up for monthly credit monitoring.

For lots more information about credit, debt and protecting yourself against identity theft, check out the related links on the next page.


More to Explore