Why I Use a Credit Monitoring Tool

I am not exactly sure if credit monitoring services are worth the money, but with nearly 10 million cases of identity theft annually I think there is some evidence to support a certain degree of paranoia. I have chosen a middle of the road approach to credit monitoring. I pay for an annual service that pulls my TransUnion report weekly and looks for changes. It is MyFico.com's Identity Theft Security Deluxe. It costs about $50 per year.

There are more expensive services that pull from all three agencies weekly, but at $100+ per year I just think they cost too much. My rationale is simply this: should someone open a new account in my name, it will likely show up at all three agencies. I want to comfort of a weekly check-up, but I don't want to pay a fortune. Identity Theft Security Deluxe seems to provide a nice balance.

The super low-budget approach to credit monitoring is to go to annualcreditreport.com once per year and pull a FREE credit report from Equifax, Experian, and TransUnion the three credit agencies. Just look them over and make sure all the accounts on there are actually yours. I do this once a year to make sure that nothing unusual has shown up at Experian or Equifax and not at TransUnion. The problem with doing only this is that if identity theft occurs the month after you check, eleven months might go by before you know that there is a problem.

I view a credit monitoring service as a necessary evil. I don't really want to pay $50 per year, but I figure it is worth the insurance policy because it will ultimately save me a lot of time and money if I catch fraudulent account activity after one week or month instead of after one year.