ID theft : credit monitoring

My kid's identity was stolen...now what?

IdentityTheft — Thu, 05 Apr 2012 16:21:00 GMT

Picture this: Your son is ready to head off to college, and as part of the process, he is applying for student loans. Sounds pretty normal, huh?

But what if your son is turned down because he has bad credit – and he's never applied for credit before?

This may sound a little far-fetched, but it happens way more than you think. The Federal Trade Commission has pointed out that child identity theft is a huge problem that is growing every day, and parents are urged to do everything they can to protect their children.

But how does child identity theft happen? Most often, thieves get their hands on the child's Social Security number, and then use the number to obtain a credit card, get a mortgage, rent an apartment, get a cell phone or apply for a job.

The thing that makes child identity theft so frustrating for its victims is that the theft goes undetected for so long. It's often not discovered until the child has grown up and is applying for credit for the first time. By then, the criminal is long gone.

How can you put a stopper in child identity theft and protect your child? First make sure you store your child's SSN in a safe, secure place. Only provide the number to others when it is absolutely necessary, and always ask if an alternate form of verification is acceptable.

Keep an eye out for pre-approved credit card offers in the mail, in your child's name. If you receive them, your child's identity may have been compromised. You'll want to contact the credit bureaus and find out if your child has a credit report, and if so, get copies.

If a theft has occurred, report it to the police, and place a credit freeze on your child's credit file, so that you'll be notified immediately if there is any further attempted activity. You may even wish to consider signing up with a credit monitoring or identity theft protection service, just to be sure.

Are credit monitoring services worth the money?

IdentityTheft — Tue, 14 Feb 2012 20:31:00 GMT

It's getting to be a much more common thing – more and more people are signing up with credit monitoring services. And it's an action that Consumer Reports says is unnecessary.

In a recent Consumer Reports Money Adviser report, the Adviser looked at credit monitoring services offered by the three credit reporting bureaus: Experian, Equifax and TransUnion. The Adviser called the services, "overrated, oversold and overpriced."

Although the credit bureaus say that monitoring credit reports is the best way to protect consumers against identity theft, the Adviser noted that monitoring of the three credit bureaus' reports is only one way to keep an eye on one's personal information, and not the most effective way, overall.

The fact is that no one person or service can prevent identity theft or identity fraud. The whole point of a credit monitoring service is to catch a thief in the act – once the information has been stolen, a credit monitoring service is supposed to pick up on illegal activity in the form of new, fraudulent accounts appearing on the victim's credit report. Once this is detected, the consumer can then take action to counter it.

But if credit monitoring doesn't prevent identity theft, what good is it? Credit monitoring can be a good thing as part of a total package of protection, but shouldn't be the only preventive measure taken. Credit monitoring, in addition to identity theft protection and your own personal actions like shredding documents bearing personal information and taking great care when online, can all work together to protect you from theft. One product, on its own, just isn't enough.

Company offers free credit monitoring – But is it really a bargain?

IdentityTheft — Wed, 04 Jan 2012 15:25:00 GMT

Credit Karma made headlines this week as the first company to offer free credit monitoring. The service includes a once-a-day check of your TransUnion credit file, and if there's any "significant" change, you'll get an e-mail. Significant, by the way, means a late payment, new account opened or a credit inquiry.

According to company CEO and founder Kenneth Lin, Credit Karma won't ask for a credit card number, there are no hidden fees and the company won't sell your personal data. All they need at sign-up, Lin says, is the last four digits of your Social Security number. If you are one of the 10 percent this doesn't work for, you'll have to surrender your whole number.

It should be noted, however, that the company will likely use your registration profile to match you with offers from its marketing partners, although the partners do not see your credit score or file.

Obviously there's a big hole in this protection – they only monitor one credit bureau. In order to effectively monitor your credit, arguably, the best way is to monitor all three credit reporting bureaus. If you want to monitor your Experian credit report for free, you can do so with Credit Sesame, which is also free.

By federal law, you are entitled to a free copy of your credit report annually from each of the three credit reporting bureaus, including the aforementioned two and Equifax. You'd probably be much better off doing this, and signing up with a paid service that monitors all three if you feel you need the extra protection.

If, however, you don't feel that's necessary, the freebies offered b Credit Karma and Credit Sesame are okay. Just weigh your options carefully and determine what will work best for you.