Fraud Protection vs. Credit Monitoring: What’s the Difference?

Personal Finance
a concept image of a leather gloved thief participating in identity fraud on a laptop

With credit card fraud and identity theft becoming bigger and bigger issues, looking for some kind of protection is a natural response. But there are so many different methods for protecting your identity that it can be overwhelming. Here’s a look at a couple of the most popular methods: fraud protection and credit monitoring.

Credit Monitoring

Credit monitoring is just what it sounds like—someone monitors your credit. There are companies out there that will do this for free, like Credit Sesame or Credit Karma, or you can pay someone to do it. (Experian, for instance, charges $5/month for their credit tracker, which is a little strange considering that they’ve theoretically got less work to do than anyone else when it comes to fetching your scores.)

Credit monitoring usually checks your credit report daily, and typically comes up with an alert system should anything appear to go wrong. Often these services are going to center around one specific credit agency—Experian, TransUnion, or Equifax. Some will even give you your FICO credit score on a regular basis. All of this can be very helpful when it comes to detecting fraud, especially credit card fraud.

Some of the paid credit monitoring services include some form of restoration—like Experian’s $50,000 credit tracker guarantee. But that’s not necessarily a common component.

Fraud Protection

Identity Theft Protection is a holistic approach to preventing identity theft. This usually involves some degree of degree of credit monitoring, depending on which company or package you select. For instance, Identity Force monitors your credit daily across all three bureaus, while LifeLock only performs credit monitoring at its top tier, and only through one bureau. Still, it’s a common component, enough so that you may see Identity Guard or LifeLock pop up in reviews of credit monitoring services.

Of course, the presence or absence of credit monitoring isn’t the sole factor in picking a fraud protection company, mainly because it’s far from the only thing that they do. Identity theft protection encapsulates a wide variety of services. These companies typically also engage in web surveillance, to find out whether your personal info is being traded on black market websites. They’ll look out for your social security number, credit cards, driver’s license, address, and more. Some of them search court records, medical records, and payday loan places for your personal information to make sure that nobody is committing crimes or soliciting services in your name or with your social security number. And that’s important because those sorts of things won’t show up on your credit report until you’re already in trouble.

In addition to combing the Internet and other odd corners of the world, ID theft protection often includes some form of lost/stolen wallet assistance, helping you cancel your cards and sometimes even fronting you money if you find yourself in a jam. They also usually come with some kind of insurance plan or service guarantee that will reimburse you for money spent clearing your name and wiping out fraudulent debt.

Which Is Best?

In the end, credit monitoring is primarily geared towards protecting against credit card fraud, while fraud protection is designed to against ID theft. As we’ve noted before, those crimes are related, but they’re distinct. So it all comes down to what you’re most concerned about. Credit score monitoring is an important way to protect yourself, and if that’s your biggest concern, there are plenty of services out there to help you, some of them free.  If you’re looking for wider protection, then find a fraud protection package that covers all the bases you want.

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