Credit Monitoring or Identity Theft Protection?

The easiest way to protect yourself against identity theft is to have someone else do it for you. But don’t trust just anyone. All protections aren’t created equal. So which is better? Credit monitoring or identity theft protection?

I’m sure there are people who will disagree with me, but in my opinion, the answer is identity theft protection, no contest. Why? Let’s take a look at a few reasons:

Cost

Your average credit monitoring service is going to run you approximately $15 a month. Sure, most plans will give you a few months free, and free credit scores, but that doesn’t make up for the fact that you’re going to pay roughly $180 a year. Per person.

Compare that to your average identity theft protection service, where plans typically start at $10 a month (less if you have a good promotional code). Yes, they probably have higher priced plans too, but you don’t really need those (more about that another day). That’s a significant savings over time, especially if you’re looking to protect your whole family.

Alert Timing

The sooner you find out about fraudulent transactions, the better. If you can find out about them before they go through, that’s WAY better! With credit monitoring, you’re only alerted to transactions or inquiries AFTER they get sent to the credit bureaus, which is typically well after the fraud occurs. It could be a couple of hours after. It could be a couple of months after. It all depends on the company’s reporting processes. Either way, that’s a long time when you’re talking about someone spending your money.

Most identity theft protection companies offer something much closer to real-time alerting. If they set fraud alerts for you, then you should be contacted before any new accounts are open. If they have their own proprietary alert system, it will typically happen just before or just after. Either way, it’s still very fast, and should give you enough time to stop the crime before any real damage can be done.

Remediation

So what happens if you’re not alerted in time to stop the identity theft? With credit monitoring, you’re probably on your own. Some companies will provide some type of remediation assistance, but don’t expect much. With credit monitoring, you’re really paying to keep track of your credit rating, not fix fraud.

With identity theft protection, preventing and fixing fraud is exactly what you’re paying for. Any decent identity theft protection company will have a certified remediation team ready to assist you if you ever become a victim. The best companies will have connections with major lenders that will make fixing any problem even easier.

Insurance/Guarantee

Credit monitoring services are starting to catch up on this one. Five years ago, they didn’t offer it at all. These days, in order to compete with the major identity theft protection companies, many of them have added some type of insurance, which will assist you in repairing any damage caused by an identity theft. $1 Million is a typical sum for an insurance/guarantee, but don’t expect to get a check for a million bucks. This is the maximum amount they will spend to hire lawyers, consultants, etc. over the course of your life. In some cases, they might also give you money to cover out-of-pocket expenses like court parking, child care, or other things you have to pay for to clear things up, but not always – make sure you read the fine print.

Scope

Credit monitoring covers exactly what the name implies, your credit reports. Identity theft protection, on the other hand, covers you for any type of identity-related fraud. That goes way beyond things that appear on your credit report. While they can’t always alert you when someone uses your information to file fraudulent tax returns or get medical attention or get out of a traffic ticket, most identity theft protection companies will provide remediation assistance for any of these situations (if yours doesn’t, it’s time to switch companies). If you’re looking for complete peace of mind, an identity theft protection company is definitely the way to go.

 

So why would anyone get credit monitoring over identity theft protection? Two reasons. First, credit monitoring is often talked about in terms that make it sound identical to or even better than identity theft protection. That’s just marketing. Don’t believe the hype. Second, credit monitoring is great if you’re thinking of buying a house or a car, because it helps you stay on top of your credit score. It’s just not the best solution for identity protection.

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