By Brad Beckstrom
If you’ve ever used a credit card, online accounts, applied for loans or online offers, you’ve most likely already had parts of your identity stolen. Somewhere someone is keeping a file on you and that includes your Social Security number, addresses, recent passwords, and other information like your mother’s maiden name.
About once every year or so we get a new credit card number when fraud is detected on one of our two credit card accounts. This is a pain especially if you use online bill pay or financial tracking tools like Quicken or Personal Capital. (Everything needs to be updated, again.)
However, it’s relatively minor and common compared to full-on identity theft. Identity theft can come in many forms. Over the years we’ve experienced people successfully changing our address and getting a new credit card sent to them. Another fraudster created an actual credit card replica that was successfully used at Nordstrom and several other brick-and-mortar retailers. We’re also part of several data breaches per year including big ones like recent Target and Experian breaches as well as smaller ones most people never hear about.
2017 was an all-time high for data breaches in the US with over 1579 breaches exposing nearly 180 million personal records.
A few years back, after the Target data breach when most of our business and personal cards had to be replaced, I almost signed up for the free one year of identity protection they offered. Then I realized that after the free year, I would be charged for ongoing identity theft protection.
So, I skipped signing up for that and did some research into several free resources. I didn’t want to pay for it or a select service that just enabled you to get a free credit report when you requested it. I wanted 24/7 monitoring and to be alerted of any changes, including information requests on my credit report.
It also needs to be free indefinitely and have excellent ratings from other users. These are a little bit harder to find and you may find many services listed as free will begin charging you for identity protection after a short period of time. There is no shortage of identity protection companies looking to sign you up for an annual, or sometimes even monthly, package for something that you can get for free. Many others just want to charge you for a free copy of your credit report.
So, I’ve done the research for you, and here are two services that are free and do a good job of monitoring your credit. I’ve used both of these for over a year and I have gotten no calls, unsolicited emails, or charges from them. They use an ad-supported model in the offers/ recommendations section of the website and links in certain offer updates.
Credit Karma: Very clean simple interface showing your up-to-date credit score. They display your up-to-date credit scores from TransUnion and Equifax. You can view all of your open and closed credit accounts including mortgages, credit cards, auto, and other loans. The dashboard includes factors that make up your credit score. You can drill down from the dashboard for lots of additional data including credit application inquiries, fraud alerts, payment history, credit age, and other factors.
Wallet Hub: Nice interface, also available in a mobile app. Wallet Hub appears to only use data from TransUnion in their credit reporting. They go a bit deeper with this data giving you a grade on each section of your credit report including things like payment history, credit utilization, debt load, and account age. They also give you recommendations for improving your credit in the wallet fitness task area.
Either of these websites should be fine for most people’s needs. After a year of using both, I have to give the edge to Credit Karma. Their fraud and data breach alerts have a bit more detail and include passwords that may have been compromised and the exact dates of recent data breaches. If you opt-in for their email list, you also get tips on new data breaches and how to freeze your credit.
Credit Karma and Wallet Hub both offer email updates with alerts when a new account is opened on your credit report, major changes, and credit score updates. These are very useful when trying to protect your credit. On one occasion, I was able to spot an unauthorized address change on my credit report and alert all credit reporting agencies of the incorrect address through Wallet Hub.
Credit Freeze, Yes or No?
There have been many stories in the personal finance press about the benefits of freezing your credit to fend off identity theft. Basically, freezing your credit stops any new loans, credit cards, or requests for information on your credit report. To unfreeze it you’ll need to communicate with all three credit reporting agencies using a pin or contacting each agency individually. No thanks.
Even though the service is technically free, there are services that charge for it as part of identity protection. A freeze does not mean someone can’t get your credit card number or Social Security number in a data breach.
Fraud alert versus credit freeze
The best way to protect your identity is to call one of the credit reporting agencies the next time your credit card company alerts you to any fraudulent transaction. Simply contact one of the agencies and let them know that there was some fraud on one of your credit cards and you would like to put a fraud alert on your account. This basically means that any time someone would like to run a credit report, the agency will call you for your approval at a number you provide. In my case, I spoke to someone at Experian and they mentioned they would put the fraud alert on my credit report and alert the other two agencies. About a week later this alert showed up on my credit reports in both Wallet Hub and Credit Karma and will stay there for a year. There is no charge for this and only requires one phone call.
Bonus I’m removed from the offers mailing list as well!
Monitoring credit card transactions the easy way.
Even with some protection in place, you can’t always depend on your bank or credit card company to monitor everyday transactions. One easy way to monitor transactions in all of your accounts is to sign up for a free service like Personal Capital or Mint. Once a week you can simply open up the app and scan all your accounts for any unusual activity. I usually do this when I’m paying bills. It’s a great way to keep an eye on your spending and stay on budget as well. You can also add properties, investment, and health savings accounts to get a total picture of your net worth.
Liability and identity theft protection insurance
If you are a homeowner, you can also ask your insurance provider if they include identity protection as part of their coverage. I recently confirmed with our homeowners’ insurance provider that they include $25,000 in identity theft protection with our existing policy. We also have the option to add $1 million in personal liability umbrella coverage that would include additional fraud protections and additional protection for personal auto liability and homeowner liability. The quote I was given on this policy was $225 a year and often requires that you have automotive and homeowners insurance.
Data breaches and passwords
Holy smokes we were in 13 data breaches in the last year. (so were you)
About a year ago I also received an email from Credit Karma noting that one of my passwords had been exposed in a multiple breaches. They even showed the last several digits of this password so I would know not to use it again. Luckily it was a password I stop using a while ago and it was mainly for nonfinancial websites.
Regardless, you should use a simple tool like 1Password and install the plug-in on your browser so that it can quickly remember and generate new passwords for any website you visit. It also now works on smartphones and tablets. I don’t recommend built-in browser password tools as if someone has access to your computer or mobile device these can pop up automatically.
To recap: How to protect your credit and get free 24/7 identity theft monitoring.
- Sign up for free credit monitoring with Credit Karma or Wallet Hub
- Monitor your transactions using Personal Capital or Mint
- If you have any credit card or other fraudulent transaction issues, call one of the reporting agencies to put a fraud alert on all credit reports.
Some people have more data out there than others. The sooner you take simple steps to protect it, the fewer hassles you will have in the future. I also recommend these steps for anyone who’s interested in improving their credit score and learning how it’s calculated.