Identity theft monitoring helps protect you from having your ID stolen and used for reprehensible purposes. That may sound very comforting but before deciding if this service is right for you, examine some of the pros and cons.

Basics of Monitoring

The main idea of these services is to watch your accounts and your credit reports for suspicious behavior then alert you to take action if necessary. The service is available through all three of the national credit bureaus as well as a number of private companies. The costs vary depending on the specifics of your protection. Some of these services also come with a guarantee in case you lose money as a result of identity theft. Many even provide services to help you restore your credit if your credit suffers from being a victim of identity theft.

The Positives

Identity theft monitoring is particularly helpful when the thief is using your information to open new credit card accounts or take out other types of loans in your name. These are the types of identity theft which are most likely to cause you big problems. Even if you are never a victim of one of these crimes, having these types of identity theft protections can provide you with peace of mind. Many of the services will assist you in getting your life back together after being a victim. According to Javelin Strategy & Research, 20% of all identity fraud cases take 80 hours or more of work to clear up. If you can have a third party that is experienced in these types of identity theft cases help reduce that time for you, the service would be worth the investment.

The Negatives

Although identity theft monitoring can be highly effective in reducing the impact of new account openings by thieves, these cases do not account for the majority of cases. Only 1.8 million cases of identity theft involved the opening of new accounts in 2005, according to the FTC, while nearly twice that many involved the misuse of existing accounts. In the case of fraud and existing accounts, you are usually protected from financial loss anyway.

The Bottom Line

Do not listen to the scare tactics used all too often to sell services. Do recognize there is a real threat and that such services may be able to help you, especially if you want peace of mind and help restoring your good credit.