Are premium credit monitoring services worth the cost?

By Michael Lloyd

You should be checking your credit file at least once a year to make sure there is no adverse information or sign of fraud. However, for a fee, all major credit reference agencies - Experian, Equifax and Callcredit - offer credit monitoring services that will alert you to suspicious activity on your credit file or if your information shows up online.

For those who don't want the hassle of checking their credit themselves, these services might sound perfect. But are they worth the extra cost?

What you get for your money
"With your £2 standard statutory credit report you'll see exactly what prospective lenders see - electoral roll information and details of credit searches, all current borrowings, card limits and details of any defaults or missed repayments," Andrew Hagger, director of money advice website Moneycomms.co.uk, said in an emailed response to questions.credit-monitoring

"This is a good option for those who would like to see a quick snapshot of their credit information, or to check that all the information is accurate and up to date before applying for credit," James Jones, head of consumer affairs at Experian, said in an emailed response to questions.

If you subscribe to a premium credit service, you'll get to see your credit score, plus extras such as ID fraud alerts, identity monitoring and more details about what's impacting your score, Hagger said. Although the top-end monitoring services offered by credit reference agencies differ, they all cost about £15 after a 30-day free trial.

If you never check your bank or credit card statements for fraudulent activity, or if you need need to have constant access to your credit file information for some reason, this might sound like a good investment. At £180 a year, however, premium services cost far more than checking your statutory file once in a while. And checking your statutory report a couple of times a year, as suggested by financial experts, can help you detect fraud, identity theft and other suspicious activity on your own,  without the extra cost.

You also could keep tabs on any credit applications filed using your identity by signing up for free services such as Noddle or ClearScore.

Comparison of credit monitoring services
Experian:
Experian's credit monitoring service, CreditExpert, gives members "tailored guidance on how to understand and improve their credit report and score, and a detailed explanation of the factors affecting their credit score," Jones said. "It also includes a web monitoring service that scours the web (including the dark web) for the customer's personal details, such as credit card numbers or passport details, alerting you if these details have shown up somewhere new online."

Equifax: "Equifax' premium monitoring service provides a valuable and comprehensive monitoring service," an Equifax spokesperson said in an emailed response to questions. "Customers get unlimited access to their Equifax credit report and score whenever they need it, as well as weekly alerts to let them know of any changes. And Equifax will alert the customer if their financial details are being shared on websites used by fraudsters."

Callcredit: Callcredit offers Credit Compass, which, according to the website, is a "comprehensive, daily report that gives you unlimited access to your credit report". In addition to giving you an in-depth look at your credit, similar to Experian and Equifax' premium services, it helps you detect fraudulent activity.

"Whenever key changes take place on your credit file, you will be sent an email alert," the Credit Compass website states. "That way you can assess whether they look fraudulent and take the necessary action as soon as possible. Our Victim of Fraud service will alert the other credit reference agencies of fraud on your account and provide you with the expert advice you need to protect your identity."

The bottom line
If you think a premium monitoring service might benefit you, you can always sign up for a free trial of your preferred service. However, carefully consider whether the process is worth it, especially if there's a chance you'll forget to cancel your trial run.

Premium credit monitoring services are great if you need to have access to your full file at all times, or if you have neither the time nor inclination to check to see if you've become the victim of fraud. Additionally, if you're considering borrowing a large amount of money to fund a transaction such as a mortgage, you'll likely find the premium monitoring services useful. Plus, you will almost certainly benefit from the credit score improvement tips they provide.

Otherwise, they're an expensive luxury that many consumers can do without.

"You have to question whether it's money well spent," Hagger says.

See related: Victims of fraud not liable for thief's charges -- usually, Protect yourself from card-not-present fraud, 6 ways to reduce your risk of financial fraud

Published: 16 December 2016