Credit monitoring

What It Means

Credit monitoring is a service that tracks your credit reportsCredit reportA record of how you've borrowed and repaid, kept by credit bureaus and sold to lenders, landlords, insurers and others who decide whether to deal with you. See more at one or more of the major bureaus and alerts you when something changes, such as a new account, a new inquiry or a change of addressChange of addressTelling the Postal Service, the IRS and everyone else who writes to you that you've moved, so mail is forwarded and official records follow you. See more. The CFPB describes it as a commercial service that usually charges a fee. It can flag a mistake or a sign of identity theftIdentity theftWhen someone uses your name, account details or other personal information without permission to open accounts, make charges or commit other fraud. See more quickly, but it tells you after something has happened; it doesn't stop your information from being stolen or misused.

How People Say It

• "The breach letter came with a year of free credit monitoring."
• "My monitoring app pinged me about a new inquiry."
• "Is it worth paying for credit monitoring?"

The Breakdown

A short example. Grace pays a monthly fee for credit monitoring and feels protected, so she never freezes her credit. A thief opens a store cardStore credit cardA credit card offered by a retailer, either usable only at that store or co-branded with a card network, often with store discounts and a higher APR. See more in her name. Her app alerts her a few days later, and she spends the next weeks disputing the account and a hard inquiryHard inquiryA check of your credit report by a lender after you apply for credit; it shows on your report for up to two years and can lower some scores a little. See more.

Where it goes wrong. The CFPB is clear that monitoring alerts you after your information has been misused; it doesn't stop the account being opened. A freeze at each bureau, free by law since 2018, would have blocked the store from reading her report in the first place.

What to watch for

• Read what a service watches: one bureau or all three, and which changes trigger an alert.
• Check the price against what's free, including weekly reports you can pull yourself at AnnualCreditReport.com.
• Pair any monitoring with a freeze at Equifax, Experian and TransUnion.
• If you're on active duty or in the National Guard, sign up for the free monitoring the bureaus must offer you.

Good to Know

Under a rule that took effect on October 31, 2019, the FTC says Equifax, Experian and TransUnion must give active duty service members and National Guard members free electronic credit monitoring, with notice within 48 hours of material additions or changes to their files. To enroll, service members submit proof of service and contact details to each bureau. For everyone else, free weekly reports at AnnualCreditReport.com let you do a manual version yourself.

Related Terms and Categories

• Credit freeze

  A free block you place on your credit report at each bureau so lenders can't read it for a new application until you lift it; also called a security freeze.

• Fraud alert

  A note on your credit report asking lenders to verify your identity before opening credit; you place it at one bureau, which must tell the other two.

• Identity theft

  When someone uses your name, account details or other personal information without permission to open accounts, make charges or commit other fraud.

• Credit report

  A record of how you've borrowed and repaid, kept by credit bureaus and sold to lenders, landlords, insurers and others who decide whether to deal with you.

• Credit lock

  A bureau's own service that blocks access to your credit report, much like a freeze, but under the company's terms instead of federal freeze law, sometimes for a fee.

• Soft inquiry

  A credit check that isn't tied to an application, such as checking your own report or a preapproved offer; it doesn't affect your credit scores.

Debt and credit