Robert G. Yetman, Jr. Editor At Large

Credit monitoring and identity theft services are very popular, but the significant amount of marketing that goes into promoting them tends to give customers a false sense of security. Experts in the field roundly dismiss the utility of credit monitoring as a means by which to protect oneself from identity thieves with any real vigor, but the services remain exceedingly popular. This is not to say they are devoid of any value, but the problem is that because they lack the aforementioned vigor in protecting someone from having his credit breached by an identity thief, you’re spending a certain amount of money…sometimes a lot…for an uncertain amount of protection. Most people don't know that they can join a service like Credit Karma for free and gain access to their credit report and monitor two of the three bureaus activity.  If you are so inclined, you can add Credit Sesame (also free) and you will be able to monitor activity at all three bureaus. 

Services like LifeLock will also implement a credit freeze. With a credit freeze, your credit file cannot be accessed without your direct approval, and in order to unfreeze, or thaw, your credit, your say-so must be given via a PIN number that you are given for that purpose. Again, what most people don't know is that they can freeze their credit without going through a third party service that charges a monthly fee. In order to initiate a freeze of your credit, you must contact each of the three credit bureaus…Equifax, Experian, and Trans Union…directly.

The PIN feature is particularly important, because it is the key to protecting your credit even if your identity is somehow compromised. On that note, remember that a credit freeze protects only your credit file…it is not identity protection, per se. However, given that identity thieves are largely interested in stealing one’s identity for the purpose of nefariously utilizing his credit, the manual, PIN protection of your files at each of the three credit bureaus means that a compromise of your identity, should that happen, will mean that your credit files still remain safe.

It’s important to note, however, that credit freezes come with some degree of inconvenience, in addition to the modest costs associated with freezing and thawing the file each time you do so; every time you enter into an arrangement, agreement, or transaction where it is necessary for a person or entity to review your credit, you will have to go to the trouble of manually unlocking, or thawing, your credit files, and one of the annoying aspects of that is that thawing typically takes longer than does freezing.

The cost of freezing and thawing credit varies by state (the mechanism is presently governed by state law, although there are calls to “federalize” the matter of credit freezing), but it can run from zero (for victims of identity theft, as well as seniors) to $10. Remember, though, that you’re freezing with each bureau, and thaws, which can run up to $12, typically have to be done at each bureau, as well.

The best candidates for the credit freeze approach to safeguarding credit are generally older folks and others for whom regular access to new lines of credit is not a priority. They can be practically arduous options for younger adults who may need to open new lines of credit on fairly constant bases, like each time they rent an apartment, open a utilities account, apply for insurance, or even apply for a job that requires a credit check. Nevertheless, to the extent that there is a sure thing in credit protection, the credit freeze is the only real choice.