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By timestaff
May 26, 2014

Credit monitoring and identity theft protection services—which run $120 to $200 a year—are definitely not necessary. Most of what these products provide you can easily do yourself, and for free.

Keep in mind that while these products are often marketed as preventative tools, they do not actually guard against identity theft. Rather, what they typically do is to regularly review your file from one or more credit bureaus, and then alert you whenever changes have been made that could signal that you’ve already been a victim (such as a request for new credit).

You can easily do the same by taking advantage of your legal right to access one free report from each of the three bureaus every 12 months via annualcreditreport.com. If you stagger your requests, you can check a credit report every four months for red flags.

If you’ve been notified of a security breach, had your wallet stolen, or think you’re likely to be victimized, say by a jilted ex, you should place a 90-day fraud alert on your file with the credit agencies, and update this alert after 90 days if needed. When you place the alert, you’re entitled to a free credit report from each bureau in addition to your one free annual report from each. This means that when you’re most vulnerable to ID theft, you have access to more frequent reports.

Of course, “If a company offers you credit monitoring for free after a breach, take it,” says U.S. Public Interest Research Group’s Ed Mierzwinski, “but never ever pay for it.”

If you’re looking to lock down your credit in order to keep thieves out, there’s a better way than buying credit monitoring: Simply place a freeze on your credit files. This instructs the bureaus to prevent new creditors from viewing your credit report and score. Because lenders usually won’t open new lines of credit without viewing your score first, this can prevent fraudsters from opening new accounts in your name.

“Credit monitoring is like shutting the door after the horse has left the barn, whereas a credit freeze is a preventative measure,” says Chi Chi Wu of the National Consumer Law Center.

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The purpose of this disclosure is to explain how we make money without charging you for our content.

Our mission is to help people at any stage of life make smart financial decisions through research, reporting, reviews, recommendations, and tools.

Earning your trust is essential to our success, and we believe transparency is critical to creating that trust. To that end, you should know that many or all of the companies featured here are partners who advertise with us.

Our content is free because our partners pay us a referral fee if you click on links or call any of the phone numbers on our site. If you choose to interact with the content on our site, we will likely receive compensation. If you don't, we will not be compensated. Ultimately the choice is yours.

Opinions are our own and our editors and staff writers are instructed to maintain editorial integrity, but compensation along with in-depth research will determine where, how, and in what order they appear on the page.

To find out more about our editorial process and how we make money, click here.

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