Credit monitoring is a financial service offered to people who
are concerned about fraud and
identity theft. When someone utilizes
credit monitoring, an agency keeps an eye on that person's
credit report and financial activities, looking for signs that unauthorized
activity is occurring. In a sense, credit monitoring could be considered the
stepped-up version of checking one's credit report one or two times a year: instead
of checking every six months, a credit monitoring agency checks all the time.
Financial experts disagree about the efficacy of
credit monitoring. Some people feel that such services are extremely
valuable, because while they cannot prevent fraud, they can catch it early, before
it balloons into a major problem which could require months or years to fix.
For people who have been victims of fraud in the past, credit monitoring can also
be useful tools for security, making people feel more comfortable. Opponents
argue that credit monitoring services usually don't do anything that a consumer
can't do, and that they may miss certain types of fraudulent activity.
When someone orders credit monitoring,
the services offered can vary. Some agencies simply keep an eye on the person's
credit report,
looking for tell-tale changes like the presence of new accounts, or an emergence
of unusual spending habits. Other services may cross reference, looking for
all data linked with a person's name or identity number so that fraudulent accounts
are identified even when they do not show up in a credit report.
Awareness of the fact that people routinely access their own
credit reports has made fraudsters more cautious. Instead of opening
an account with all of someone's information, a thief might use a false name and
address and a real identity number. The account will be approved because it
is linked with a real identity, but the account may not show up on a credit report,
because the name and address don't match. This type of account may slip through
the cracks at a credit monitoring agency until collection activities begin and the
account is traced back to the identity number linked with it.
Banks often offer credit monitoring
to their patrons, usually for a fee, although sometimes credit monitoring is free
with top-tier accounts. It is also possible to secure the services of a credit
monitoring agency independently. Identity fraud prevention and protection
tends to offer more coverage than a basic credit monitoring plan, since it involves
the active pursuit of prevention of identity theft, rather than just passive monitoring
of credit reports.