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Don’t Pay For Credit Score Monitoring

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MasterCard Visa WalletCNNMoney tackled the question of why you don’t need credit score monitoring. Credit score monitoring is when you pay one of the credit bureaus (Equifax, TransUnion, Experian) a set fee each month to tell you if your score goes up or down. The fees range anywhere from $15 to $20 a month (or more) and that’s $15-$20 too much.

Your credit score is important but it’s not so important you need to monitor it. It’s like your weight. It’s important to know it but not so important you need to monitor it every single day. It’s certainly not worth it to pay your doctor to use his or her finely tuned scale to get your exact weight (nor is it so important you should strip off every article of clothing!), your “off by 5 pounds” scale at home is good enough.

If you want credit monitoring, I recommend using a service like Credit Karma. They give you a better than “home-scale” version of your credit score for free. It’s a TransUnion credit score based on their formula, not FICO, but it’s good enough. Most monitoring services justify themselves by saying you can help monitor your score for fraud and getting a free score from Credit Karma accomplishes that.

If you are curious about how to protect your credit from fraud and don’t want to pay a service like Lifelock, here’s a post on do-it-yourself credit protection chock full of tips.

Save your hard earned money for something else.

(Photo: thetruthabout)

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20 Responses to “Don’t Pay For Credit Score Monitoring”

  1. Anthony says:

    I use Credit Karma. It’s a great, free service, although it’s a bit hard to gauge whether or not it’s accurate. Most certainly, it’s “close enough”. But is it +/- 5 points? 10 points? 20 points? I don’t know.

    Also, what other services are there like Credit Karma? I’d be interested in trying out other options…

  2. eric says:

    I agree. It’s not something for the average person to obsess over. Just know your range and move on. It’s not a necessary expense most of the time (unless you’re a victim of fraud recently or something).

  3. zapeta says:

    Credit Karma is great. I’m glad that a free alternative it out there.

  4. I never understood the need to know you credit score at all time. Just checking my credit report 3 times a year is enough for me to make sure that everything is in order.

  5. Jim, what are your thoughts on using credit card monitoring in the months preceding major purchases that requires your credit score (i.e. a home purchase) If you us it for the few months preceding closing, I could see the value in using a paid service. Curious on what your thoughts are.

    • Jim says:

      I think knowing your score right before a major purchase is valuable, it’ll help you decide whether you can get affordable financing, but monitoring isn’t. There’s very little you can do to improve your score (most of it involves fixing negative errors, if you have any) so monitoring the changes won’t be as valuable.

  6. Alex says:

    I pay 69.99 per year (less than 6$ a month) to have access to Equifax credit score (via my Discover credit card). I’m OK to buy two cups of coffee less per month in order to known my exact credit score. And I’m not obsessed with it. I check it once a month or so. I do feel better as I still think it is a better fraud monitor. Plus, Discover already has my credit info so I’m not giving it out to anyone else.

    • cubiclegeoff says:

      I’m just curious why you think you need to see your score so often.

      • billsnider says:

        There is an old saying.

        You should never worry about things you control since you control it and you should never worry about things you can’t control since you have no control.

        The above is like credit scores. I do not know mine and could care less.

        Bill Snider

  7. cubiclegeoff says:

    If I’m curious, I use credit karma. It’s good enough. And as long as my reports (that I check annually) are clean, I don’t worry about it. I will check before getting a major loan, but that’s rare.

  8. bob smith says:

    Comment to Jim:

    Funny that you mention the article. There’s a little snippet that goes perfectly with your article at the Wiki Community Board on SlickDeals.net. See http://slickdeals.net/forums/showthread.php?t=2064934

  9. Greg says:

    Some credit unions also offer free credit scores. Alliant Credit Union offers a free Experian-based Credit score on a quarterly basis. It’s not Fico, but as stated above it’s good enough!

  10. Chris Dunn says:

    It seems to me like they try selling the “insurance” and add the other stuff as bonuses.

    Thx for the post,

    Chris

  11. Kevin says:

    I’ve used Karma before. Good enough for a rough idea.

  12. Wntmore says:

    I joined Credit Karma a month after I paid for my reports and credit scores. Credit Karma was not even close to the ones that Transunion & Equifax have on me. Credit Karma was over 60 points lower then both of them. All they wanted to do was to try and get me to apply for a credit card or refinance my mortgage & auto loan. WHAT A WASTE OF TIME!

  13. Ty Moeri says:

    Dear creditscore monitor I did not authorize for you to take money out of my account. This is the second time this has happen. Please put the money back into my account. If this happen again I will get a lawyer Thank You Ty Moeri

  14. Brad says:

    Also try CreditSesame – similar to CreditKarma but uses Experian’s report vice TransUnion. Check out my site for a link.

  15. Joey says:

    Knowing your credit scores and being aware of changes to your credit profile (e.g. someone else taking out a loan with your name and social, or a collection agency sending out a bill to an old address) should be paramount.

    “Your credit score is important but it’s not so important you need to monitor it.”

    Yeah, right.

    Unless you plan on living in the wilderness with no ties to contemporary society, you should safeguard and monitor your credit like you would your children. If you plan on buying anything with credit, a car, a boat, a house, etc. the difference of 1 point on the loan can equate from hundreds to tens of thousands of dollars.

    For example, let’s look at a hypothetical home loan for $175,000.

    A 30-year mortgage for 175k at 5% APR gives you a base monthly payment of $939.44.

    A 30-year mortgage for 175k at 3.5% APR gives you a base monthly payment of $785.83.

    That’s a difference of $153.61 per month.

    How many months are in 30 years? 360.

    360 x 153.61 = $53,000.

    Having a stellar credit score enables you to buy what you want for cheaper and with greater ease.

    Subscribing to a monitoring service that catches everything going on with your credit will alert you if there is any suspicious activity going on. You will be able to see all accounts out in your name and how they stand. Maybe you have a delinquent account or a collection out there you don’t even know about that is hindering your score.

    I highly recommend staying on top of your credit profile. Once you have a bad credit score, it becomes very difficult to purchase anything on credit, or if you are approved, you get a high APR. It literally takes years to rebuild a bad credit profile, take preventative measures to deter it from ever happening and you will save a lot of money and be more free to purchase big-ticket items like cars and houses.

  16. Ed says:

    I got my free score and a pretty good report card at Credit.com. I also got an estimated fico score. These people have always been really helpful when I’ve asked questions about my credit card debt (I have a lot, but working on it) and how to improve my score on their forum. forum.credit.com

    I checked out the other sites listed above, and they were good to. Even if all the scores aren’t the same…which is annoying, but the system has problems for sure.

  17. Esclaved says:

    I’ve just started looking for a home to buy and have learnt quite a few things:

    I never cared about my score until now when I realized that if I had a good or v good credit, i would have been able to buy right away and for a much better price. Now I have to wait until my score improves.

    Although I’m not voting in favor of paying monthly for monitoring but you should keep an eye at-least every few months. My 2 cents.

    PS – Thanks for allowing to comment without registering (which I’d never have done ;)


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