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.

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 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, you can buy it at 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 below.

Author's Note: How Credit Monitoring Works

I consider myself an intelligent person. I graduated from college, I'm gainfully employed and I've published articles on dozens of subjects, including personal finance. Yet I am still baffled by the world of credit scores and credit reports. Heck, I even wrote the article How Credit Reporting Agencies Work, but I still can't tell you exactly how the "Big Three" credit reporting companies come up with their magic numbers or why they have a vice grip on our very personal — and valuable — credit information. Experian and others have shown some shaky ethics in upselling unsuspecting consumers on credit monitoring. I hope that the FTC keeps the pressure on these companies to prevent further confusion about credit reporting, credit monitoring and the exaggerated specter of identity theft.

Related Articles


  • Blyskal, Jeff. "Expect less and pay more with Target's credit monitoring." Consumer Reports. Feb. 6, 2014. (July 3, 2014)
  • "How Credit Monitoring Works." (July 3, 2014)
  • Experian. "Credit Monitoring." (July 3, 2014)
  • Federal Trade Commission. "Extended Fraud Alerts and Credit Freezes." (July 3, 2014)
  • Federal Trade Commission. "Free Credit Reports." (July 3, 2014)
  • Federal Trade Commission. "Place a Fraud Alert." (July 3, 2014)
  • Khalfani-Cox, Lynnette. "Why Critics Are Wrong About Credit Monitoring Services." DailyFinance. June 14, 2010. (July 3, 2014)
  • Kirschheimer, Sid. "When Free Credit Reports Are Not Free." AARP. April 12, 2010. (July 4, 2014)
  • Lieber, Ron. "A Free Credit Score Followed By a Monthly Bill." The New York Times. Nov. 2, 2009. (July 3, 2014)
  • Palmer, Kimberly. "How credit card companies spot fraud before you do." U.S. News & World Report. Nov. 27, 2013. (July 3, 2014)
  • Weston, Liz. "Is Credit Monitoring a Waste?" MSN Money. Aug. 20, 2012. (July 3, 2014)