Do you even need Identity Theft Prevention Services?
Identity theft crime has created a lot of problems, headaches and financial burdens for its victims. And it has also created a new industry that offers an array of services. Some of these services are worth it and some are just a waste of your hard earned money.
There are things you can do yourself to reduce the risks of becoming a victim of identity theft; however, a great identity theft prevention service can offer much better solutions.
Before you even consider subscribing to any of these services, let’s evaluate what’s at our disposal:
Credit Freeze, aka Security Freeze, allows you to restrict access to your credit file. It will cost you $0.00-$20.00 to freeze your credit file per each credit reporting agency. Credit Freeze is not a cure for all; it will only prevent new financial account fraud. Every time you apply for a new account, you have to temporarily lift (or thaw) credit freeze from your credit file, which will cost you an additional fee per credit reporting agency.
Credit Lock offered by Equifax
Credit Lock is very similar to credit freeze. In theory, it is even better, but it is ONLY in theory. Yes, Credit Lock blocks third parties from accessing your credit file and you have the ability to unlock your file with a click of a button. Sounds great, right? But you can only lock your Equifax file and you have to subscribe to an expensive ID monitoring service offered by Equifax. If you have Credit Lock by Equifax, you still have to deal with the inconveniences of credit freeze placed with the other credit reporting agencies. In my opinion, this service offered by Equifax is a waste of your time and money.
For about $15.00 per month, you will get alerts if there are any changes in your credit file. This service does just that-monitor your credit reports. However, this is something you can do yourself without spending a penny. This service will not prevent identity theft, it will only notify you of changes in your credit file. Waste of your money. See how you can get your free credit report in this article.
Credit Score Monitoring
Offered by FICO for about $15.00 per month, this service is similar to Credit Monitoring service, but, as the name suggests, it monitors your Credit Score. Credit Score changes are influenced by changes and activities in your credit file; therefore, it would be redundant and wasteful to use this service. If you need to get your FICO score, just pay a one-time fee and be done with it.
Identity Theft Insurance
This is probably the most useless service I have ever encountered. Consider getting Identity Theft insurance only if it comes as a part of your homeowners insurance policy with no additional fee. Identity Theft insurance plans offered by credit card companies are a waste of money. They cost about $10.00 per month, offer very limited reimbursement for out-of-pocket expenses and may carry a pretty high deductible.
Identity Theft Prevention Services
Out of all fee-based identity theft prevention solutions, I would recommend using one of the Identity Theft Prevention companies in addition to credit freeze. Not only do they provide prevention services, but they also help victims to restore their identities. When deciding which company to choose, make sure it offers the following:
- Credit monitoring
- Credit reports
- Databases monitoring
- Cyber/Internet surveillance
- Identity Theft Recovery assistance
- Service Guarantees
Remember, it is cheaper to prevent identity theft than deal with it. And, of course, there is no sure way of preventing identity theft completely; you can only reduce the risk of becoming a victim of identity theft.
With this being said, I strongly believe that identity theft prevention should be a part of your financial planning.
What methods do you use to prevent identity theft? Do you worry about identity theft at all? Leave a comment below.