I received an interesting email yesterday about a new credit monitoring product. The reason the email interested me is because unlike the expensive credit monitoring products offered by the credit bureaus and other financial institutions, this product is free.
I've written about The Pros and Cons of Credit Monitoring Services for Investopedia's Financial Edge. I found that most credit monitoring services cost $10 to $15 a month.Over the course of a year, that's $120 to $180.
CreditKarma.com is now the first company to offer free credit monitoring to all U.S. consumers. This product monitors a consumer’s credit file on a daily basis and alerts him or her when a significant change occurs.
“Consumers can stay on top of their credit and protect themselves from identity theft and credit reporting errors without being charged a monthly fee,” said Ken Lin, CEO of CreditKarma.com. “Our goal at CreditKarma.com is to provide easy access to a person’s own credit information and empower them with the timeliest information on their financial health.”
Here’s how it works:
1.A consumer enrolls at CreditKarma.com. Registration is free and takes less than two minutes.
2.CreditKarma.com monitors the consumer’s credit report for free on a daily basis.
3.A significant change occurs in their credit file, such as a new credit inquiry, a delinquent payment or improved payment history.
4.CreditKarma.com notes the new activity and emails the user a credit alert, letting them know about the important change.
CreditKarma.com already provides more than 4 million consumers with free credit scores and access to free credit monitoring to help them realize the everyday cost savings of having good credit by offering personalized savings recommendations for credit cards, student, auto, mortgage and home equity loans. It also provides financial education and access to free tools that empower consumers to take charge of their financial health including the Credit Report Card, Credit Score Simulator and Credit Card Statistics. To learn more, visit www.creditkarma.com.
Keep in mind that any credit monitoring service, whether paid or free, will have shortcomings. Such a service can't prevent identity theft from happening to you, for example; it can only notify you that it's already occurred. Even then, credit monitoring is likely to miss some forms of identity theft, such as the following:
- someone using your information to apply for a job
- someone using your information to get a cell phone
- someone using your Social Security number, but not your name, to open new accounts