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The Lowdown on Credit Monitoring

Most consumer advocates say the services are overpriced for their payback

Q. Are credit monitoring services worth the money?

A. Not according to many consumer advocates, who maintain that at $9 to $15 a month the services are overpriced for their payback.

Such services may give you access to credit reports, scores or quick alerts if someone applies for a credit account in your name — this can enable you to block that application and avoid long-term damage to your credit standing. The services also offer education tools to help you better manage your credit.

But most services — run by the three big credit-reporting bureaus as well as third-party companies — don't guard against such dangers as someone impersonating you to get medical care or committing fraud with your Social Security number, driver's license, debit card, checking account or existing credit card.

A less expensive way to protect yourself: Take advantage of a federal law that allows you to get a free copy of your credit report from each bureau once a year — these reports will show whether anyone has applied for credit in your name. Read the free credit education material that's online at various financial websites.

To further guard against new account fraud, apply to the reporting bureaus for a credit freeze, which prevents anyone from looking at your credit report; lenders won't issue new credit if they can't first assess payback history.

Freezes are free if you're an identity theft victim (you may need to show a police report). Otherwise, the fee from each bureau ranges from $3 to $20, depending on the state you live in. If you plan to apply for credit, new insurance, utility services or other services that require your report to be checked, a freeze can be "thawed," which also costs a fee in some states. You can learn how and where to request a freeze at this Consumers Union Web page.

And anyone can put in place a free "fraud alert," which lasts 90 days but can be renewed in 90-day intervals indefinitely. Alerts mean that when lenders get a request to open credit in your name, they are supposed (but not required by law) to contact you by phone to verify that you made the request.

To request a fraud alert, contact any of the three credit bureaus:

Equifax: 1-800-525-6285; P.O. Box 740241, Atlanta, GA 30374-0241.

Experian: 1-888-397-3742; P.O. Box 9554, Allen, TX 75013.

TransUnion: 1-800-680-7289; Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92834-6790.

Sid Kirchheimer writes about consumer and health issues. Have a question for Sid Kirchheimer about a new product, a new kind of bank account? Check out the Ask Sid archive. If you don’t find your answer there, send a query.