Back in 2006, The New York Times reported that the credit monitoring business was making nearly a billion dollars a year selling their services to individuals. These services purport to notify you of fraud, and usually allow you to keep close tabs on your actual credit score. But are they really worth your while?

The answer, as with most financial questions, is, “It depends.”

In some instances, paying for credit monitoring just doesn’t make sense, but in others, it does make a great deal of sense. Here’s what you should know about paying for credit monitoring services:

When Credit Monitoring Doesn’t Make Sense

There are times when credit monitoring services, especially the expensive kind, just don’t make sense. You can get a free annual credit report, and that’s enough for most of us. Here are situations in which it doesn’t make sense to pay for credit monitoring: 


    • You want to prevent fraud. The truth of the matter is that credit monitoring services don’t actually preventID theft. These services can help you immediately catch some forms of ID theft – the ones that involve a thief opening up a credit account using your name and Social Security number. But these services don’t do a single thing to prevent theft from happening. The best way to do that is to freeze your credit, and that’s only a good solution some of the time!


    • You just need your credit report. There are a few good reasons to keep tabs on your credit score, but if you just want to check your credit report a few times a year (which you should do!) credit monitoring services aren’t worth your time or money. You can check your credit report for free once per year at each of the three major credit reporting bureaus – Equifax, Experian, and TransUnion. Why pay for something you can get for free?


    • You don’t have the cash to spare. Speaking of getting things for free, you may even be able to check your credit score (not just your report!) for free with some new services like Credit Sesame. Credit monitoring services cost $10-$15 a month on average, according to Fox Business. If this is more than mere pocket change in your budget, regular, paid credit monitoring probably doesn’t make sense.


When Credit Monitoring is Wise

On the other hand, sometimes credit monitoring services do make sense. Whether you get an updated credit score every month or every three months, here are situations in which you might want to pay for credit monitoring: 


    • You’ve been a victim of ID theft. Victims of identity theft are legally entitled to free copies of their credit reports after filing a fraud alert, according to the FTC. However, if you’re afraid that your personal information is still floating around out there, you may want to look into a credit monitoring service that specializes in alerting you to new credit accounts open in your name. Again, these services can’t prevent further fraud, but they can help you notice problems right away and take care of them as soon as possible.


    • You’re building or rebuilding credit. If you’re just starting to build your credit, or are rebuilding after a financial disaster, credit score monitoring might make sense. In this case, you can check out your score each month to ensure that it’s going up as it should be. One option here is to check out a service like’s Score Watch, which can forecast what certain financial decisions will do to your credit score, and which choices will raise your score the fastest.


    • You’re getting ready for a major purchase. If you’re preparing to buy a home – the largest purchase most of us will ever make – or another large credit-based purchase, consider monitoring your credit score for a few months before hand. Again, a service that lets you see which actions to take to quickly improve your score can be helpful here. And while you’re in the home buying process, you’ll be able to catch any credit score red flags before they cause problems with your potential lenders.


Paying to monitor your credit score, like most financial decisions, makes sense in some cases but not in others. Your goal should be to use these services when they make the most sense for you, but not to let fear drive you to spend money when you don’t need to!

Abby Hayes is a freelance personal finance writer and contributor for personal finance blog Dough Roller. She spends her spare time bargain hunting for her family of three.

June 26, 2013

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