Continuously monitoring your credit now can save you a lot of headaches in the future, especially if you’re suddenly plagued by fraudulent abuses of your personal information. In 2020, the Federal Trade Commission received more than 1.4 million reports of identity theft in the U.S., double the previous year, with the top three reports listed as credit card fraud, government documents or benefits fraud and loan or lease fraud.
While credit monitoring services don’t prevent fraud from showing up on your credit report or affecting your credit score, experts say they can help detect major changes to inform necessary action. But credit monitoring sites and apps vary when it comes to cost and services — understanding what they do and what’s best for you are important before investing in a specific plan. To figure out the best approach to finding the best credit monitoring apps, we consulted financial experts.
Credit report vs. credit score
Credit score and credit report are similar terms with major differences.
A credit report is a detailed compilation of information from your financial history, including the number of accounts you have open, outstanding balances on each account, public records and credit inquiries. In the U.S., there are three major national credit bureaus in charge of supplying this information to governments and lenders — Experian, TransUnion and Equifax.
“Having a healthy credit report is especially important if you have plans to make a major purchase like a car or mortgage” or plan to “apply for a new job as some employers check your credit report,” said Colleen McCreary, chief people officer and financial advocate at Credit Karma.
To maintain your financial health, Rod Griffin, the senior director of consumer education and advocacy at Experian, added that you should generally “begin monitoring your credit at least three months before applying for a mortgage or any large purchase.”
A 2020 study showed that complaints about credit reporting to the Consumer Financial Protection Bureau increased by more than 50 percent since 2019 and accounted for over 60 percent of all complaints submitted in 2020, with most complaints cited as “incorrect information on your report.” These errors “can be really devastating if you don’t address them over time,” said Shang Saavedra, a personal finance expert and money coach who runs the blog Save My Cents. She said it’s “good to remain educated on your financial situation” and track changes to both your credit score and report. That way, any issues or errors “don’t become even bigger problems down the road,” especially when you’re hoping to buy a house, a car or other substantial purchases.
A credit score is essentially like a numerical grade given based on details in your credit report that allows lenders to determine your credit worthiness (and in turn your interest rate). Lenders like credit card companies will pay scoring companies like VantageScore and the Fair Isaac Corporation (FICO) — the most widely used company by lenders, according to the company’s website — to create a credit score representing your financial situation, ranging from 300 up to 850. It’s based on different categories, from payment history to the amount owed and provides a certain amount of weight to the score. VantageScore and FICO have slightly different scoring criteria, so scores will likely vary between both companies.
What do credit monitoring services do?
Credit monitoring services scan data about you collected by credit bureaus and your credit history, including public records and account openings, notifying you of any activity and changes to your credit report.
“Rather than having to constantly check new reports for new information, you can let that information come to you with credit monitoring,” said David Blumberg, the senior director of public relations at TransUnion. He noted that some services also help you protect and limit access to your credit report “in case you suspect someone has stolen your identity or is trying to get credit in your name, and dispute items listed on your report that may not be accurate or complete.”
Depending on the service, they may also notify you of changes to your credit score, allowing you to review new activity and determine whether it was fraudulent or includes any errors. A credit monitoring service can look at the following:
- New account openings, which include credit cards and loans
- Name or address changes in your credit file
- Updated public records, including court dates and bankruptcies
- Unpaid accounts sent to collections, as well as balances and other payments
- Hard credit inquiries, including submitted credit card and loan applications
What credit monitoring services don’t do
Credit monitoring services are informational: They don’t prevent identity theft, nor do they stop people from opening new accounts or making unauthorized payments in your name. They also don’t report identity theft — people will need to contact the FTC if they suspect someone is using their personal information. Credit monitoring services don’t prevent your information from being stolen in data breaches, fix errors found in your credit report, freeze your credit in case of fraud or warn you if anyone filed a tax return in your name.
Paying for a credit monitoring service
Should you pay for a credit monitoring service or stick to the free options? Some credit monitoring services offer premium subscriptions for a monthly fee. These might include automatic scans for major changes in your credit report from one or more bureaus and identity theft protection, which “proactively monitors consumers’ credit files, alerts them if their personal information has been used and helps them recover any money lost as a result of the identity theft,” noted McCreary.
Free credit monitoring services will still alert you of changes to your credit report, but will typically monitor only one or two credit bureaus at once and monitor hard credit inquiries and changes to your personal information. “This is enough coverage for most people as it allows them to monitor their reports on their own and take action should anything unusual appear on their report,” McCreary said, adding that free services typically “offer complete access to your credit score.”
Some paid services offer scans of your personal information on both the public and dark web. Dominique Broadway, an award-winning financial planner, personal finance coach and founder of Finances De·mys·ti·fied, told us that these alerts help her figure out what account passwords to change and how to manage her cyber security.
You also have the option to personally monitor both your credit report and your credit score for free, as long as you remember to stay on top of it. Before Covid, federal law let you check your credit reports (not your score) once every 12 months from each of the three major bureaus for free through AnnualCreditReport.com. Starting in April 2020, the FTC began providing free weekly copies of your credit report from all three bureaus, an option that the federal agency recently extended until April 2022.
In terms of credit score, various credit card companies allow you to check it for free themselves, including American Express, Capital One, Chase, Citibank and Discover. Some services, like CreditWise from Capital One, provide the VantageScore 3.0, while others like Discover provide your FICO score. Additionally, some credit card companies like Discover and American Express don’t require you to own one of their credit cards to check your score through their service.
And checking your credit score for free doesn’t hurt or lower your score — it’s considered a “soft” inquiry, which doesn’t impact your score, as opposed to a “hard” inquiry, like applying for a credit card or loan, which does affect it.
If preventing identity theft is your top concern, freezing your credit reports is a free option that blocks access to your reports and prevents lenders and card issuers from making hard inquiries. You’ll need to contact each bureau individually to freeze your credit, and later remember to “unfreeze” it when you want to apply for a card or loan. While freezing your credit reports doesn’t completely prevent fraudulent activity, it’s highly recommended if you think your information may have been compromised, especially in a data breach.
Best credit monitoring apps in 2021
When looking for a credit monitoring service that’s right for you, McCreary recommended comparing the services and benefits each service offers, while Saavedra noted that signing up for a free trial or even using a free version before investing in a paid subscription is worth considering to experience the offering first-hand and determine what information is most useful to you.
This service scans and monitors the dark web, social media, court records, medical benefits statements and databases like sex offender registries to track any fraudulent use of your information. It sends out alerts if there’s any unauthorized use of your credit cards, bank information, medical ID, social security number or other personal information, while offering up to $1 million in identity fraud insurance to cover lost wages and out-of-pocket expenses, according to Donna Parent, the chief marketing officer at Sontiq, the parent company of IdentityForce. There are two subscription plans available:
- UltraSecure for $18 per month (or $180 annually)
- UltraSecure+Credit for $24 per month (or $240 annually).
For credit monitoring purposes, the latter is the best option since it not only gives you consistent access to your credit reports from all three bureaus and tracks any changes, it also lets you see and track your credit score over time, which isn’t common across credit monitoring services. IdentityForce offers a credit score simulator that helps you determine how certain financial decisions will likely affect your score, too.
Credit Karma is a free credit monitoring service and therefore, like other free services, doesn’t require you to input your credit card information to access its features. You’ll receive alerts from two credit bureau reports — TransUnion and Equifax. Based on those credit reports, it compiles its own VantageScore 3.0 that provides a number and range to determine whether your score is “good” or “very good,” for instance. The biggest drawback is that it doesn’t monitor all three bureaus, meaning you’ll need to get another monitoring service to track your report from Experian. For your TransUnion report, Credit Karma offers a simple Direct Dispute feature that lets you dispute any errors — this isn’t offered for your Equifax report, so you’ll need to contact the credit bureau directly.
Although it’s slightly pricier, PrivacyGuard offers typical premium credit monitoring features, including monitoring your credit reports from all three bureaus and notifying you of any potential fraud. It also includes secure browser and secure keyboard features for both your computer and mobile device, which “protect you from keylogging and phishing threats that target confidential information,” according to its website. There are three subscriptions tiers:
- Identity ($10 monthly) includes features like public and dark web scanning, social security number monitoring and looks into changes in personal information.
- Credit ($20 monthly) monitors your credit score and credit report from all three bureaus, but doesn’t offer dark web scanning or identity theft insurance.
- Total protection ($25 monthly) combines the identity and credit plans and includes public and dark web scanning, public records monitoring, credit report and score updates and up to $1 million in identity theft insurance.
There are multiple versions of your FICO score and any of the MyFICO subscriptions offers you access to them. All plans also offer $1 million in identity theft insurance and access to experts that can help you with identity fraud concerns and questions.
- The Basic plan is $20 per month and monitors your credit report from Experian while tracking changes in your account balance, new account openings and credit inquiries.
- The Advanced and Premier plan, $30 per month and $40 per month respectively, offer the same features as the Basic plan, but instead monitor your reports from all three credit bureaus. The main difference between the two is the Advanced provides updates every three months, while the Premier updates you monthly.
Credit card companies with credit monitoring
If you’re hoping to monitor your credit through your credit card company — either through a paid or free service — here are a few to consider.
CreditWise by Capital One
Whether you’re a Capital One member or not, you can use CreditWise to check your credit score and report at no cost to you. The service monitors your credit reports from TransUnion and Experian, provides a VantageScore 3.0 credit score based on your TransUnion report every week, offers dark web scanning and tracks fraudulent use of your social security number.
CreditSecure by American Express
Exclusive to American Express card members, this credit monitoring service lets you see and refresh your FICO scores and three-bureau credit reports every 30 days. You’ll receive alerts for changes in your score and reports, as well as dark web monitoring for compromised personal data, social security trace alerts and lost wallet assistance. In case you want to try it out, American Express notes that it’ll charge first-time CreditSecure customers $1 for the first 30 days, and $17 each month after.
Discover Identity Theft Protection
For $15 per month, Discover’s Identity Theft Protection service offers credit monitoring from all three bureaus, alerts you if a bank account opens in your name, scans thousands of sites on the dark web for your personal information and notifies you of significant credit balance changes greater than $5,000 and credit limit changes greater than $100 reported to Experian. As its name suggests, the service offers identity theft insurance up to $1 million covering legal expenses, stolen funds and lost wages. Child Identity Protection, which monitors fraudulent use of your child’s personal information and social security number on the dark web, can include up to 10 children at no additional cost.
Chase Credit Journey
This service is free for both Chase cardholders and those who aren’t affiliated with the bank. It provides routine updates on your VantageScore 3.0 and alerts you of changes on your TransUnion report, including new credit inquiries, updates to your credit limit and new account openings. Chase also offers a score simulator that allows you to determine how certain financial decisions affect your score.
While your credit score is informed by your credit report, the number should never be a definition of self-worth, Saavedra said, especially after the devastating financial effects of the coronavirus pandemic. “There’s no shame in knowing what your credit score is,” she said. “I think a lot of people feel really scared of finding out that number. They feel like that number defines who they are, it really doesn’t.”
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