What Are Credit Monitoring Services?

by Contributing Writer

Overview

As millions of Americans become victims of identity theft each year, credit monitoring services have emerged as a prudent way for individuals to ensure that their credit reports are accurate and free from fraudulent activity.
The Facts

In the United States, three credit reporting agencies track a person's borrowing and repayment history: Experian, Equifax, and TransUnion. Credit monitoring services track credit reports daily and alert a subscriber whenever there is a change.

Background

According to the Federal Trade Commission, as many as 9 million Americans have their identity stolen each year. The best way for a person to find out if his identity has been stolen is to monitor bank accounts and credit reports on a regular basis.
Function

Credit monitoring services alert a person within 24 hours of any change to a credit report, including credit inquiries. If an inquiry is made by someone trying to fraudulently obtain credit, the credit monitoring service allows the subscriber to stop the identity theft before any damage is done.
Features

Each credit monitoring service offers different features that may include access to all three credit reports, access to credit scores, and identity theft insurance. Monthly fees for credit monitoring services can vary based on the features included.
Considerations

According to ConsumersUnion.org, credit monitoring services can be costly, and it may be more beneficial for a person to monitor his own credit by ordering a free credit report from the three credit reporting agencies each year.