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Finance

Tips on credit monitoring services

Credit monitoring services generally charge you for something you can do for free: Pull your credit report once a year from each of the three credit bureaus, check for errors or funny business, add fraud alerts. We can do each of those for ourselves.

Then four years ago, something happened that made Reporter Andy Wise think twice about using one of these services. Here's what he told us:

I got a letter from the holding company of my investment portfolio. It said my portfolio was part of a family of investments that had been "compromised."

The company said it didn't really believe my account was specifically at risk, but as an act of good faith, it offered me two free years of a credit monitoring service "...just to make sure."

I thought that was a nice gesture, but I didn't want it. I check my reports annually. I thought a credit monitoring service would just be a hassle.

About a year later, the monitoring service shot me an e-mail. It caught a mistake on my credit report.

It turns out a guy who shares my legal name lives about two miles away from me. Same name, same town, same zip code.

One of the credit bureaus had inadvertently changed my address to his address and assigned one of his credit card accounts to my credit report.

If I hadn't accepted the monitoring service, it would have been at least another year before I caught the mistake. Instead, the service caught it and notified me immediately.

I had everything fixed within 48 hours.

If you're considering a credit monitoring service, I recommend you only shop the ones that are sold or backed by one of the three credit bureaus. Whatever their cost, those services are directly accountable to the bureaus who initiate and manage your reports.

If you're in the same situation I was in -- in which your investment company offers you a free monitoring service -- make sure you mark the date the coverage will expire. Sixty days before it expires, call the company to either cancel or renew it. Otherwise, it may automatically renew, and that free monitoring service won't be free anymore.

The Privacy Rights Clearinghouse has everything you should ever consider about a credit monitoring service. It has prepared a "fact sheet" with all the relevant information right here.

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