Credit Monitoring

In this post I’m going to talk about:

  1. Credit Monitoring
  2. Credit Freezing
  3. Identity Theft Protection

I.  Credit Monitoring

Yes, of course this is a ripoff.  At first I thought I thought they wanted $4.95/month.  That’s half a Netflix subscription… a monthly payment for a company to monitor your report of monthly payments.  But then I noticed that’s only the *first* month.  They want $20/month for this bullshit.  Ridiculous!

Lifelock was a big player in this space.  Avoid!


II.  Credit Freezing

What’s the best way to protect yourself from fraud?  Pay off all your consumer credit accounts, close the accounts, and then freeze your credit report with all three credit reports (Equifax, Experian, Transunion).  This will prevent anyone from opening new credit under your name.  This freeze costs $10 per bureau, so $30.  There are 4 states that sunset the freeze after 7 years (wtf).

Four states sunset your credit freeze automatically after seven years. These states include Kentucky, Nebraska, Pennsylvania and South Dakota.

So even if you live in a sunset state, that’s a cost of $30 / (12*7) = 36 cents per month.  That’s 55X cheaper than credit monitoring.

You will be sent a letter with a pin number for each bureau.  You’ll need the PIN to unfreeze the account if you apply for a mortgage.  After I pay off my mortgage, I’ll be doing freezing my credit once all the paperwork clears.

III.  Identity Theft Protection

This is insurance for dealing with all the bullshit *after* somebody has used your identity to commit a bunch of fraud.  You’re paying for someone else to collect the documentation (police reports, bank statements, etc.) and call all of the banks and companies to deal with the hassle after the fraud has already been committed.

Dave Ramsey recommends getting this.  I don’t personally have it and don’t plan on getting it.  It costs about $6.75/month.  It is mainly a shield for your time, because you won’t owe any money that was fraudulently charged against your name, but proving that will suck up time spent on the phone.  People are skeptical about the value:

The odds of identity theft is about seven percent for people over 16 years of age. There are a few points we must consider:

  1. Those who are willing to buy insurance to protect their identity are likely more conscious of sensitive personal data and less likely to have their identity stolen.

  2. In 2014, only 14% of identity theft victims had any financial liability.

  3. Half of the 14% above were responsible for less than $100.

  4. Most people spent less than one day fixing the problem.

  5. 10% spent more than 1 month trying to fix the issue.


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