With increasing concerns about identity theft, many people consider signing up for paid identity theft protection services. But are they actually necessary?
What These Services Do
Identity protection services typically offer monitoring and alerts. They notify you if there are changes to your credit report, such as new accounts or credit inquiries. While this can be helpful, it’s important to understand that these services do not prevent fraud from happening.
The Most Effective Protection (and It’s Free)
Cybersecurity experts consistently emphasize two simple, highly effective steps:
1. Freeze Your Credit
A credit freeze prevents lenders from accessing your credit file, which makes it much harder for someone to open new accounts in your name. This is one of the strongest protections against identity theft and it’s free.
Placing a credit freeze is free, quick, and one of the most effective ways to prevent identity theft. You just need to do it with each of the three credit bureaus:
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Log in and select the option to freeze your credit file
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You must freeze your credit with each bureau separately—doing it with one does not cover the others
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2. Set Up Free Credit Monitoring
Free tools like Experian and Credit Karma provide alerts when there is activity on your credit report, helping you detect potential issues early.
What About Bank Accounts?
It’s a common misconception that identity protection services safeguard your bank accounts. They generally do not. The best protection here is staying vigilant:
- Regularly review your account activity
- Report any suspicious transactions promptly
For personal bank accounts, there are consumer protections in place so if fraud does occur and is reported to your bank in a timely manner, individuals are often able to recover their funds.
The Bottom Line
Paid identity protection services may offer convenience, but they don’t provide significantly stronger protection than what you can do yourself for free.
For additional insights on identity theft protection, you may find this guide helpful.