Short answer: if you can get them free, yes. They do no harm. But, please read on to find out what you can do to actually reduce your risk of identity theft.
You’ve probably seen the advertisements: protect your credit score, defend your identity, fortify your finances. Companies like LifeLock, Identity Force, Identity Guard, etc., all vie to get a payment from you in exchange for protecting you online. Do they work? Well, yeah, for what they do, they do in fact work. If you can find a free service, like through Credit Karma, then by all means go for it. But no matter where you get it from, you need to be aware of their shortcomings.
Most identity theft prevention services don’t do much more than monitor your credit report. They usually don’t take additional steps to prevent your information from getting out in the first place. They don’t freeze your credit, they don’t opt out of pre-approving credit cards, they don’t monitor your bank accounts for potentially fraudulent transactions, they don’t watch for new utility applications. They don’t because they don’t have the power to. Let me go over these steps in some detail.
Freezing Your Credit
You can call the credit reporting bureaus (Experian, Trans Union, and Equifax) and have them freeze your credit. This will lock your file and prevent anyone from seeing it at all. No soft pulls, no hard pulls, nothing. It can’t be accessed, period. When you do need to take out a loan or do anything with your credit, you can have the freeze temporarily lifted, after which it will refreeze. That closes off one attack vector: criminals opening new credit cards or other accounts in your name. It’s much easier to monitor cards and such that you already have, because you know they exist. Of course, you can always use your annual free credit report, but there can be a significant amount of time between an attacker doing something to your report and the timing of when you pull the report. This service usually costs a small fee.
Setting a Fraud Alert
You can set what is called a “Fraud Alert” on your credit file. File with any of the three reporting agencies and they will alert the other two. For the next 90 days, they will be required to alert you to any activity on your file. This requires a bit of upkeep – refiling after the 90-day period, making sure that the alert is properly set, and so on. The reason identity protection services can’t do this for you is because of a lawsuit between Experian and LifeLock. Setting an alert is free; the cost is in keeping up with it.
Opt Out of Pre-Approved Offers
One of the best things you can do is use https://www.optoutprescreen.com/ to stop companies from sending you preapproved card offers. Those can be intercepted by criminals to steal your identity. You won’t get any of that junk mail unless you solicit it from the company, so that closes another attack vector. You can opt-out digitally for five years or use a mail-in application to do so permanently. How great is that? I actually found out about this last one and filled out the form in just a couple of minutes, which is what prompted me to write this article.
So, in conclusion: they might be worth your money. But, there are still many steps that you, personally, have to take. Weigh credit monitoring services closely, and be aware of the holes they leave. Take those steps that only you can take, and use free or paid services to automate what can be automated. That way, you will have less to worry about, and you will feel informed which leads to less stress.