Do Credit Monitoring Services Protect You From Fraud?

Do Credit Monitoring Services Protect You From Fraud?

Financial fraud accounts for many of the most common crimes in 2022. As we have started using online services more and more, it has become easier for fraudsters to steal our financial data. As such, identity theft is frighteningly common. Often, we realize that we are being defrauded only when it is too late.

There are a number of ways to try and prevent financial fraud. It’s a good idea to check your credit score regularly to ensure no unauthorized activity has occurred. It is also worthwhile to take extra care to check that you’re using a secure payment portal when paying for things online. Furthermore, a VPN will protect you from hackers who can steal your data.

One service that has been touted as a good way of preventing fraud is credit monitoring. But what exactly is credit monitoring and do credit monitoring services really protect you?

Here’s what you need to know about whether to use credit monitoring services.

What is a credit monitoring service?

A credit monitoring service is exactly as it sounds. It tracks the activity shown on your credit report, alerting you every time an activity is added. You could do this yourself, but it takes regular maintenance and, unless you are checking every day, you may find instances of fraud too late.

Here are the instances most credit monitoring services will alert you about:

  • Hard credit inquiries: these are the inquiries made when you apply for credit (or someone fraudulently applies in your name)
  • New credit accounts opened in your name
  • Payments and balances on your lines of credit
  • New public records reporting things like bankruptcy
  • Your personal data appearing on the dark web

With these services in mind, does credit monitoring really protect you from fraud?

Where credit monitoring falls short

Where credit monitoring falls short

Credit monitoring is not a surefire way to protect yourself from fraud. As it is merely a monitoring service, all it does is alert you to the possibility that someone is using your information fraudulently. It is up to you to then act before further damage is done. This can save you a lot of financial strife. However, it could also be too late to act.

While credit monitoring will not actually stop fraud from occurring, it is extremely worthwhile to be alerted to potential issues. Without credit monitoring, it could be months before you even realize you have been defrauded.

Since credit monitoring services cannot stop fraudulent activity, are there any other ways to prevent credit fraud?

Freeze your credit

When you are not applying for any new credit, you can freeze your credit entirely. This prevents anyone from accessing your credit reports or applying for credit in your name. This is something you can do for free by freezing your credit reports with every single credit bureau.

Freezing your credit is a great option for anyone who does not regularly need to apply for new credit or who is not building their credit score. However, if you need to access your credit, freezing your credit will serve as a major inconvenience.

Secure your data

Identity theft can feel like something we have no control over, especially when big credit companies can be hacked and leak the personal data of millions of Americans. However, we do have some control. Any financial accounts we access online are potential routes for hackers to steal our data. As such, it is crucial that you secure your data.

You can do this by setting strong passwords and implementing two-factor authentication on all of your accounts. It is well worth the inconvenience of having to get an OTP on your phone in order to prevent identity theft.

You may also benefit from using a VPN to secure your connection. A VPN hides your data from your internet service provider (ISP). It can prevent hackers from getting your data.

Take care with emails and cold calls

Take care with emails and cold calls

There are still many scammers who use emails and cold calls to try and get your data. They may disguise themselves as a real provider that you use, tricking you into entering your username and password, thereafter logging in as you, and changing your details to lock you out.

No one is immune from falling for phishing attacks. Take care with any emails or calls you get from financial providers and never trust a website without ‘https’ in the URL.

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Islah Ejaz is a real tech fanatic who has been writing for tech since 2016. His insights in tech are remarkable, as he keeps a close eye on the latest tech innovations & inventions, news, updates, and releases. Binge-watching series and listening to podcasts is what keeps him firm. He is also a gaming enthusiast, and gaming gives him the ultimate pleasure.