There are several companies that offer credit monitoring services, but for fees as high as $27 a month. At the same time, many credit card issuers are offering free credit scores and other monitoring services to cardholders, and sometimes even to non-customers.
So should you pay for credit monitoring services with these free options? Let’s take a look.
What you can get for free
A copy of your credit report
By law, you can get a free copy of your credit report every 12 months from each credit reporting company. You can obtain your credit reports from the three major consumer credit bureaus: Equifax, Experian, and TransUnion by going to AnnualCreditReport.com, so there’s certainly no need to pay for this service. Be sure to go to this exact web site, as there are many sites with similar names that will charge you for this otherwise free service.
You’re also entitled to a new copy of your credit report if you’re denied credit (i.e. a loan or credit card) for any reason. To obtain a report after an “adverse action” you need to contact the credit bureau whose report was used to deny you credit.
Beyond the free credit reports, many credit card issuers now offer credit scores and other credit monitoring services for free. For example, Capital One offers both customers and non-customers access to its CreditWise service for free. CreditWise includes your VantageScore 3.0 credit score based on data from your TransUnion credit report. This service will also send you alerts when there’s a change to your credit report, including recent inquiries and delinquent accounts. Finally, it includes a credit simulator to help you predict the potential impact of possible financial decisions.
The Discover it® Cash Back also offers its free Credit Scorecard service to customers and non-customers alike. This service gives you access to your FICO credit score based on your Experian credit report. It shows you the factors used to create your report, such as missed payments, credit utilization, and recent inquiries.
And recently, Discover announced a new, free service that monitors risky websites that illegally sell or trade personal data. This service also monitors your Experian credit report for new accounts, which helps you spot possible identity theft. However, these identity protection services are only available to Discover cardholders.
Chase Credit Cards offers its Credit Journey program to its cardholders and non-customers. Credit Journey provides a VantageScore 3.0 credit score powered by TransUnion. It offers a summary of your total credit balance, credit utilization rate and late payments across credit accounts. It also features a score simulator and a graph of your credit history.
Other card issuers that offer customers a free credit scores include American Express, Bank of America, Barclays, and Citi.
With all of these free services available, what additional features do credit monitoring services offer?
Many of these credit monitoring services have features that duplicate what’s available for free. For example, TransUnion offers a service for $19.95 a month that watches your credit reports and lets you know when there’s changes to your accounts.
Some credit monitoring services also offer identity restoration insurance and services, lost-wallet protection, and fraud resolution support. However, these services are also provided as benefits to some premium credit card users.
What do you need?
If you hold a credit card from a major card issuer, you likely already have free access to your credit score. Even if you don’t, you can get these services for free from companies like Capital One, Chase, and Discover. When you combine these services with the free annual credit reports that you are entitled to, it duplicates most of what the credit monitoring services are offering to sell you.
Furthermore, those who have accounts with companies that have had major security breaches will often receive free credit monitoring services. For example, Target offered its customers free credit monitoring after its systems were hacked in 2014.
With so many credit monitoring services available for free, only the most paranoid victims of previous identity theft will feel the need to pay extra for additional protections offered by these paid services.
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