I’m new to this whole credit nonsense. My question is; Should I sign up for Credit Monitoring/Restoration when I don’t have a Credit Card? I have a Visa Debit…
Is this a stupid question???
Ahh, thank you everyone. =)
That’s not a stupid question. It’s smart, because you want to know more.
I don’t think you need to sign up for credit monitoring. I personally think credit monitoring for the most part is a scam, and just a business, like anything else. It might be good for seniors or people who are totally clueless about their finances, but I think you sound savvy enough to start doing it yourself. It just takes a little time.
Credit monitoring is more of like a protection against identity theft. So, technically, yes, even though you don’t have a credit card, you could still ‘need’ credit monitoring, because your identity could still be stolen, a person could still steal your social security number and other info and create phony credit accounts in your name. In that situation, what a credit monitoring service would do is alert you to any new and unusual information on your credit report. They also offer an insurance of sorts, usually covering a certain amount of $$ in damage if anything actually does happen like that, and sometimes offer assistance in getting it resolved. In addition, someone could also use your Visa debit card like a credit card online to make phony purchases (happened to me). But, when stuff does happen, banks I’ve found are used to dealing with this sort of thing, and pretty much try to help you get it corrected as quickly as possible, even temporarily fronting you the amount that was stolen, while they conduct an investigation. If it turns out to really be fraud, they will let you keep the money, as long as it’s not more than xxx. So, a monitoring service is often an act in redundancy IMO.
Credit "Restoration" is something different … it’s a service that would go through and "restore" your credit either after you screwed it up yourself, or someone stole your identity and screwed it up for you. Again, it’s more like an insurance policy, and unless the situation got way out of control, anything that happens is probably something you could handle on your own. (phone calls, paperwork, persistence)
But, if you have no idea about credit, you probably don’t know your credit score, so there’s no way you’d know whether or not you’d need to "restore" anything just yet.
My suggestions:
1. Start checking your credit score regularly. Visit www.myfico.com (they’re the people who actually created the FICO score, totally legit) and purchase a credit report from each of the 3 credit agencies, or at least just Equifax if you can only afford one. They’re about $15 each. The only agency I don’t really like is Experian, because they stopped providing as many details. You’ll see what I mean if you get 1 from all three. My other BIG suggestion would be to buy the Suze Orman credit kit or whatever it’s called on myfico.com. It’s about $50, BUT it includes 3 free credit reports (so you’re only spending an extra $5 really), and it makes reading your credit report WAY more user friendly, & explains each section in plain English. It also tells you what you need to do in order to improve your score. And, if there are any accounts on your credit history that are fraudulent, it supplies info and forms on how to go about correcting it. I’ve been using it for several yrs, and it’s one of the best things I did to start understanding my credit. I check my scores every three months, which might be overkill, but I’m paranoid, lol. IMO you should check them at least 1x a year, more often if you’re going to be taking out a loan or applying for a card of any kind, so you know what kinds of interest rates you’ll be eligible for.
Also, I would NOT get my credit report through any of those "freecreditreport.com" type places … usually you have to sign up for some ‘trial’ service, that then takes an arm and a leg to cancel. Or, you’ll start getting thousands of pieces of junk mail daily, because you’ve now provided them with all your personal info.
2. Check your bank account *frequently* to make sure no unusual purchases or transactions are taking place. I’m anal, so I check my account online every day to see what’s gone through, etc. A few months ago when I logged in and saw several fraudulent transactions totaling more than $600 going through, I was glad that I was so anal! I caught them right away, and contacted the vendors and had them reversed.
If anything does ever happen, as far as someone stealing your identity, as long as you catch it quickly, although still a hassle, in my experience it doesn’t have to be devastating. I’ve had identity theft happen to me 3 times in my life so far. Each time I caught it right away and was able to notify my bank or the vendors from whom the service or product had been purchased, they did an investigation, I filled out a bunch of paperwork, and it was resolved in a couple of weeks. Once a phone company employee created a phony calling card in my name, and charged $3k worth of phone calls to my bill. That took about a month to have resolved. It’s a pain in the butt, I’m not going to lie, so it’s up to you – a credit monitoring service might provide assistance in getting it resolved.
Stuff does happen, and you do need to protect yourself. If having a credit monitoring service works better for you it’s definitely something to look into. But, I don’t think it’s anything you can’t do on your own, and potentially do a better job at.
You can also call each of the three credit agencies, and ask them to put a kind of lock on your credit (I think it’s actually called flag) on your account. The *downside* is when you go to apply for a loan or credit card, the lender will see that flag and then have to go through extra steps to get you approved (usually involves calling your personal phone number, to speak to you directly). And, from my understanding, once on there, the flag cannot be removed, it has to expire.
The 1 program I do like the sounds of, is LifeLock … for a fee, they protect your credit and identity for life. The downside is similar to what I was talking about in the previous paragraph, not as easy approval for credit, etc.
Good luck!
Credit Repair and Restoration by the Nations Foremost Authority on FAST Credit Repair.
FDI Company president William J. Andreoli interviews Brian House of Credit Trax.