We Tracked Down The Best Free Credit Monitoring Services
Credit is one of the most critical aspects of our financial lives. Staying on top of it is vitally important for anyone who wishes to live well financially.
Unfortunately, most American citizens are in large amounts of debt, and it seems to only get worse by the day. Add to that the increased identity theft as the world becomes more and more digital. It can all quickly add up to financial disaster for many people.
On the bright side, the digital technology we know and love so well brought along online credit monitoring services. These services can help us take charge of our financial lives, get out from under debt, and meet other financial goals.
What is Credit Monitoring?
Credit monitoring is a service through which the provider keeps an eye out for changes in your credit. If the service notices any changes, it alerts you so you can take care of the issue before it gets any worse.
Credit monitoring alerts you if any of the following occur:
If anyone checks your credit
When new debt gets added
If a payment gets marked as late
If new credit gets opened in your name
When credit limits change
If there is a legal judgment or bankruptcy added to your record
Credit Monitoring VS Identity Monitoring?
You have probably heard of both identity monitoring and credit monitoring. Some people think they mean the same thing, but there are stark differences.
While the two sometimes come packaged together, it is crucial to know the differences to ensure you get what you are looking for. Credit monitoring strictly monitors changes to your credit report. Identity monitoring typically alerts when it notices any of the following in your name:
Change of address requests
Payday loan applications
Orders for any new utilities, cable services, and internet services
Court records and arrests
Websites that identity thieves use or sell stolen private information on
Some enhanced identity theft protection services monitor for any mention of your name on social media and bank account usage. Some credit monitoring and identity monitoring companies offer overlapping services. The possibilities are endless and depend solely on that service.
Best Free Credit Monitoring Services
There are many credit monitoring options available, but the following five are some of the best free services to choose from.
1. Credit Karma
Credit Karma is my favorite free credit monitoring service, and I use it every month. It not only provides information on my TransUnion and Equifax credit scores but also provides several recommendations to help improve credit.
Upon logging in, I get an immediate view of both my Transunion and Equifax credit scores. If the scores have changed, it includes up or down arrows along with the number of points. So if my credit score increased by five points, I see an up arrow and a "5" on the first page.
As I scroll down, it shows me different things I can try, such as:
A credit card I can use to help build my credit.
An offer for car insurance with a low rate that is based on my credit score.
Blogs with information for improving finances.
What is available changes regularly, and not everything is the right choice for me. However, some are very helpful.
It also shows me details for each credit report and provides simulations for things like what changes I need to make to qualify for a mortgage. Additionally, it offers a savings account option that is excellent if you need somewhere to save for a house or car.
Overall, Credit Karma is a great free option for everyone. You can use it to monitor your credit, build credit, and educate yourself. I recommend it to pretty much anyone who needs help with their credit.
2. CreditWise from Capital One
I don't have as much experience with CreditWise or the other options on this list. However, I have tried them out and read some awesome reviews about them.
If you have heard of CreditWise, you might have heard that it's not accurate. This is not actually the case. There are two commonly used types of credit scores: Vantage Scores and FICO Scores. FICO scores are used most often, so many credit monitoring services show you those.
CreditWise, on the other hand, shows Vantage Scores. As they are calculated differently, the two scores are rarely- if ever- the same. Most people, though, are not aware of that CreditWise provides different scores, so it is easy to mistake the monitoring service as being inaccurate.
CreditWise shows you both TransUnion and Experian credit scores and detailed credit reports. It also provides advice, simulations, and alerts if your email or private information ends up on the dark web.
Using CreditWise alongside Credit Karma is a good idea. The combination would give you access to all three credit bureau reports as well as both types of credit scores.
3. Experian Free Credit Monitoring Services
Experian- the credit bureau- also provides free credit monitoring with your FICO score. It provides an updated credit report every 30 days and alerts you when changes take place.
If anything is incorrect, you can dispute it directly on their website. You also have the option to give your credit score a boost by adding some extra bills to your credit report.
The biggest downside to using Experian is that it only monitors your Experian credit report. It's a great option, but you will certainly need to use it with another service or two to get your full credit situation.
4. Credit Sesame
Credit Sesame is very similar to Credit Karma. One of the biggest differences is the dashboard. Whereas Credit Karma shows your scores and recommendations on the front page, Credit Sesame shows your total amount of debt as well as your grade on the five credit factors.
The other major difference is that Credit Karma gives you access to two credit bureau reports. Credit Sesame only gives access to Transunion. It does still give you a pretty accurate FICO score, though- within the range of other services' accuracy.
5. WalletHub
WalletHub is another free credit monitoring service that can help you stay on track. In regards to the credit reports and scores, WalletHub's service is not much different as it provides access to your TransUnion report and score. One upside, though, is that it updates daily instead of weekly or monthly.
There are several other perks. For one thing, there is a wealth of educational materials on its website. Putting those materials to good use can give you the knowledge and confidence you need to turn around your financial life.
The company also offers several simulators and calculators for everything from savings to interest rates. You can use them to help you map out the best course of action for every financial choice you need to make.
Which One Is Most Accurate?
All of the options listed below have about the same level of accuracy, but it's important to know this: None of these or even the paid ones will be accurate 100 percent of the time.
Everywhere you apply for credit has its own way of looking at your credit. Mortgage lenders do not pull the same factors of your credit as a credit card company does. They all have different formulas to calculate an applicant's creditworthiness. That means that your credit score looks different to them all.
However, these services still provide a good indicator of your financial health. I heard a mortgage broker say one time that Credit Karma's scores are usually within 10 points- give or take- of the score she pulled for applicants. So while they may not be completely accurate, they give a pretty close picture.
Are Free Credit Monitoring Services Any Good?
Yes, they certainly are useful. Granted, like with anything else, paid services typically offer a little more. Some might also provide identity protection, access to all three credit reports, or more.
However, free credit monitoring services still offer a lot to help you get your credit in good shape. Truthfully, it comes down to what you do with the information you receive.
The truth is that both paid and free credit monitoring services only go so far. Please understand that monitoring your credit alone does not fix any trouble. Monitoring is a tool to use- not a magical solution.
It's Only a Part of the Solution
First and foremost, there is always a chance that something slips through the cracks- some things that a service does not notice. No one and nothing is perfect.
Second, unless you take additional steps, credit monitoring does no good. I mean that if you get an alert that someone opened an account in your name, you actually need to take steps to remedy that situation. No service does not do the work on its own. In fact, without you to point out that it's not your account, the service won't know anyway. It's up to you.
Use More Than One
Different businesses report to different credit bureaus, so each has different information. And each of the free credit monitoring services provides access to different credit reports and credit scores. For the best results, consider using more than one free credit monitoring service- just be sure they monitor different credit reports.
Don’t Miss Anything On Your Report
Benefits of Using Free Credit Monitoring Services
I could give you theoretical situations or tell you some true stories to drive the point home. I like learning from real experiences, so I'll share my stories.
Let's start with what happens when you don't have credit monitoring. Over ten years ago, I parted ways with someone who no longer needed to be in my life. Little did I know that while I was getting away, he was grabbing onto everything of mine he could- including credit, debit cards, and even my social security number. I might have noticed had I not been so desperate to get away.
Regardless of how it happened, my next year was horrible. I got bills for a credit card I was not even aware was in use. Even worse, I got tickets from traffic stops I was not involved in. Back then, in my town, if you got pulled over without your license, you could just give your social security number.
It turned out that he had given my social security number to some girl he started dating. Every time she got pulled over, she would give my social security number. When she got tickets, they were in my name.
All of this was happening in a time that I knew nothing about credit monitoring. It certainly was not so easy to get access to, but I wish it would have been. I almost went to jail for unpaid traffic tickets, and I was thousands of dollars in debt. Credit monitoring could have helped me catch all of this long before it became such a big problem.
What If I Don't Use Credit?
Believe it or not, there are people out there that pay cash for everything. There's nothing wrong with that, of course. It's just that most of us can't go grab $100,000 out of the bank to buy a house.
For those who do use cash for everything, you may be wondering why you should even care about your credit. I've had a few people ask me this question, so I'll share with you what I told them. Everyone needs to monitor their credit for three major reasons:
- Identity Theft
Just because you don't use your credit does not mean someone else won't. Think about it. If you are not keeping an eye on your credit, any identity thief could easily steal your identity and get credit in your name- and you will be none the wiser. You may not want to use credit, but do you really want to pay for someone else's shopping spree? Keeping an eye on your credit is about more than borrowing money or opening a credit card. It's also a great way to help you protect your identity and your wallet.
- Most People Can't Avoid Using Credit
Unless you have so much money in your bank that you can literally do everything you need to do- including buying cars and houses, going on vacations, and anything else- and still not run out of money, you will probably need to use credit at some point.
- It Can Be Useful to Have Good Credit
Even if you do not need to get a loan, you may want a particular job that considers your credit in its hiring process. Additionally, many landlords and property management companies check credit on potential tenants. Good credit is not always about borrowing money.
Additional Tips
The following tips can be a big help when trying to monitor and manage your credit.
Many banks and credit card companies have started providing free credit monitoring services to their customers. Check with yours to determine if that's the case.
You can get one free credit report from each bureau yearly and anytime you get denied credit at the Annual Credit Report website. Even though I use credit monitoring, I still get my annual reports because they are much more thorough than the others.
Start freezing your credit during inactive periods. All three credit bureaus now provide the option of freezing your credit when you are not using it. You easily log onto their websites, choose the freeze option and follow the prompts, and then unfreeze it when you need to sign up for something with credit. It's really easy to do, and it keeps unauthorized things from hitting your credit.
Conclusion
No matter your current financial situation, credit monitoring services are a wise move. They can help you get out of debt, stay out of debt, keep an eye out for debts that don't belong to you, and more. Sign up for a few of the free services mentioned above to get the best possible results.