Unfortunately, monitoring is where many consumers are being pushed because companies who offer these services stand to make a lot of money off of you, since these services require monthly fees that can cost you upwards of $200 a year.
Monitoring is also a reactive technique to identify theft, not a proactive one. By the time you’re aware of fraudulent activity on your account, it’s already too late, you’ve already lost the money. In addition, many banks have policies that say they will reimburse you up to a certain amount if you report the activity within 60 days. But alerts typically don’t appear on your credit report for 60 days, so by the time you find out, it’s too late to be reimbursed at all.
Fraud alerts aren’t a good option because you must often choose between being annoyed and having enough coverage. Typically, you choose the amount you wish to be alerted about. Opting to be notified every time a suspicious $50 charge is made would be aggravating, while opting to be notified when a suspicious $1000 charge is made wouldn’t be enough coverage.
I believe that freezing your credit is the best course of action. Some people are referring to this as the “nuclear option,” but I wholeheartedly disagree.
How many houses do you buy on average per week? Zero.
How many cars do you lease on average per week? Zero.
How many credit cards do you apply for on average per week? Zero.
There is absolutely no need for your credit to be unfrozen at all times. Yes, you must freeze your account with all three credit bureaus: Equifax, TransUnion, and Experian. And yes, you must unfreeze your account every time a lender needs access to it. And yes, freezing and unfreezing your account does cost money.
However! The pros entirely outweigh these perceived cons. Freezing your account with each bureau can be done online, which will at most cost you 15 minutes per application, as opposed to the 175 hours the average victim of identity theft spends recovering from an attack.
A word to the wise: If you choose to freeze your credit online, do not google and go. There are many fake sites out there waiting for your information. Make sure you have the right site before entering any information. Go to the bureau’s website and search for their freezing application through there.
As for the cost, Experian just announced that they will be waiving the fee for freezing your account with them until November: https://www.freeze.equifax.com/Freeze/jsp/SFF_PersonalIDInfo.jsp. Freezing your account with other bureaus differs by state, but typically ranges from $0-$10 per bureau. When you want to lift the freeze, you will have to pay another fee similar in dollar amount. However, this is nothing compared to the $1,400 the average victim pays in out-of-pocket recovery expenses, and is negligible compared to having your accounts completely drained.
There are many security benefits to this option as well. Accessing your credit through a PIN that you can keep in a safe place, such as an encrypted password vault, is a sure-fire way to ensure that only legitimate requests are being made into your credit. For example, you’ll always know when you’re in the market for a loan, which means you’ll always know the appropriate time for your credit to be accessible and who is requesting access. You can even ask potential creditors which bureau they use so that you don’t have to unfreeze all three.
Overall, the credit freeze is an easy, cost-effective way to prevent your credit reports from being used by identity thieves. Locking your credit file is superior to being notified of fraudulent activity AFTER the fact.
Here are links on how to freeze your account with TransUnion and Experian: