Are Credit Monitoring Services Worthwhile? It Depends – The Simple Dollar

Are Credit Monitoring Services Worthwhile? It Depends - The Simple Dollar

According to Pew Research, 64% of Americans have been victims of a data breach on a health or financial account. For many, those data breaches have resulted in negative impacts on their credit due to unauthorized access or applications for new lines of credit.

That’s where credit monitoring services step in. A credit monitoring service works with one or more of the three major credit bureaus — Experian, Equifax, and TransUnion — and monitors all additions to your credit report, whether they’re caused by your use of credit or for nefarious reasons. 

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It’s important to note that monitoring your credit alone won’t ensure a good credit score. If you want to have a consistently good credit score that will help you borrow money and get better insurance rates, you should start by carefully building good credit

Here’s how credit monitoring services work, and whether you should consider using one yourself.

What do credit monitoring services do?

Credit monitoring services watch your credit report carefully to see if anyone has attempted to use your credit recently, whether to verify your true identity, provide information about you or open a credit line in your name. Most of the time, these are actions authorized by you, but when these things are happening because someone is trying to steal your credit, you’ll want to know as soon as possible.

What’s included in credit monitoring services

Credit monitoring services typically include ongoing monitoring of your credit report from at least one of the major credit bureaus, with some plans monitoring your report at each of the three major bureaus. They also typically include an ongoing calculation of your credit score

These services notify you when there is a significant change to any of your monitored credit reports or your calculated credit score, as a sequence of minor things on your credit report that might not individually be of concern may add up to a noteworthy drop in your score. With credit monitoring services, you’ll also get access to your credit report. 

What’s not included in credit monitoring services

Unless you have signed up for additional identity theft protection programs, credit monitoring services typically do not act automatically on your behalf. They simply alert you to an issue and often suggest actions that you should take to fix them, but don’t take those actions for you.

Some companies have offerings that will take some limited actions on your behalf automatically based on the credit monitoring, but those are typically additional services with additional cost.

How much do credit monitoring services cost?

Credit monitoring services alone tend to be inexpensive. There are a number of free credit monitoring services, and others cost just a small amount, typically under $10 per month. The expense comes in when you move to broader services that include other forms of identity theft protection. Services that provide those additional features tend to start at around the $10 per month level and can range as high as $40 per month. The cost of these services is almost directly in line with the service provider’s reputation and the breadth of identity protection services offered above and beyond basic credit monitoring.

Credit monitoring service companies and cost

Provider Basic Plan Cost What’s Included in Basic Premium Plan Cost What’s Included in Premium
Identity Guard $8.99 per month billed monthly, $7.50 per month billed annually $1 million in insurance, risk management score, certain alerts, and more $29.99 per month billed monthly, $24.99 per month billed annually Monthly credit score, 3-bureau credit report, social insight report, and more
LifeLock $9.99 per month for the first year Up to $25,000 in stolen funds reimbursement, up to $1 million for lawyers, identity and social security number alerts, dark web monitoring, and more $29.99 per month for the first year Up to $1 million in stolen funds reimbursement, three-bureau annual credit reports and scores, one-bureau monthly credit score tracking, and more
IdentityForce $9.99 per month or $99.90 per year Fraud monitoring, dark web monitoring, account alerts, $1 million identity theft insurance, and more $19.99 per month or $199.90 per year Three-bureau credit monitoring, reports, and scores
Experian $9.99 per month after 30 day trial or $99.99 per year Up to $500,000 in identity theft insurance, one-bureau credit monitoring, score tracking, and more $19.99 per month after 30 day trial or $199.99 per year Up to $1 million in identity theft insurance, three-bureau credit monitoring and score tracking

Are free credit monitoring services good?

Free credit monitoring services tend to provide solid credit monitoring, but are strictly limited to that specific service. They often focus on just one or two credit bureaus and usually don’t provide extra perks like identity theft coverage. Services provided by larger banks, like Capital One’s CreditWise service, are good choices because they typically already have strong security, plus you may already be a customer.

However, it’s good to remember that if a company’s service is completely free, you’re the product, not the customer. It will either try to upsell you to a much better paid service, encourage you to use more services from that company or use your information to target you with advertisements.

Alternative ways to monitor your credit

If you’re wary of using a free credit monitoring service, but don’t want to pay to keep an eye on your credit, what are your options? The most straightforward way is to get in the habit of regularly accessing your credit report directly. The federal government gives each citizen free access to their credit report from each of the three credit bureaus once per year. You can access this tool directly at Simply set a calendar reminder to check your credit report every four months.

Credit monitoring vs. identity theft protection

What distinguishes a credit monitoring service from an identity theft protection service? 

In short, a credit monitoring service simply watches for significant changes to your credit and alerts you. An identity theft protection service monitors more things, such as if someone files a postal service change of address form, if your name shows up in court filings or if someone signs up for utilities in your name. Credit monitoring doesn’t offer those additional measures — it sticks exclusively to your credit.

How to choose the best credit monitoring service for you

The best first step is to check your credit report yourself using Choose one of the three credit bureaus to receive your report from, then go through it carefully to make sure you understand it. If you decide this process is too time-consuming, see if your bank or credit card issuer offers any free credit monitoring services and sign up for them, as you’re already a customer. Other membership services may also have credit monitoring services available, such as Costco’s Complete ID service

You may also be eligible for free credit monitoring services through a legal settlement due to a data breach. You can find a database of major data breaches at the Privacy Rights Clearinghouse, so you can search through them to see if any apply to you and whether those data breaches make you eligible for free credit monitoring.

If you don’t have access to credit monitoring elsewhere and are hesitant to use free offerings, there are many low-cost paid credit monitoring services. The biggest advantage they offer over free credit monitoring services is the addition of some level of identity theft insurance, meaning they will step in and help if you are financially damaged by identity theft. This is a relatively rare situation, but it can be valuable. 

If you are considering paying for a separate credit monitoring service or identity theft protection package, consider your own risk level. Have you been a victim of identity theft in the past, or been a successful target of identity theft scams? Do you shop online at smaller retailers, particularly ones that don’t use a major payment provider like PayPal or Square? If you avoid these things, stick with a credit monitoring service. Otherwise, robust identity theft protection may be the right choice for you.

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