Like many people, MrConsumer has had a variety of ID theft notification services that have been offered by various companies that have experienced a data breach. He has also signed up for some from financial websites that offer credit monitoring as a free benefit. All these plans are supposed to be an early warning system to alert you when someone applies for credit in your name or when there are major changes to your credit report. If it was a crook and not you, a quick call could stop that new credit line from being opened.
On January 6, a little before 1 PM, I applied for a new credit card. I got an email confirmation of my application from the bank at 12:58 PM and received almost instant approval. Seconds after that, also at 12:58 PM, I received an email from Experian entitled, “Alert: Change to your credit file detected, Edgar.” It alerted me that a bank/credit card inquiry had been made on my account. Wow! How is that for being on the ball? However, it wasn’t until 24 days later that I received an alert from them that a new trade line (account) had been opened and added to my credit report. This service from Experian is called CreditWorks Basic, and it only monitors activity on Experian credit reports and not the other two credit reporting agencies — Equifax and Trans Union.
But what about all the other ID theft notification services I had subscribed to? How fast did I receive alerts from them?
*MOUSE PRINT:
Experian’s other service offered to AAA members didn’t notify me of the credit application until the next day, and CapitalOne took three days. Worse, none of the other services ever let me know that someone (me) was applying for credit. Why is that?
We asked an Experian executive and found out that credit bureaus don’t generally share inquiries made by lenders with their competitors. In other words, if you apply for a credit card and the card issuer gets your credit report from Experian, Experian doesn’t share that information with Trans Union or Equifax.
If you don’t happen to have a credit monitoring service that explicitly watches the credit bureau which was contacted for a copy of your credit report by the lender, you are likely to never get a notice that someone has accessed your file. Yikes! If your monitoring plan is connected to the bureau from which your credit file was pulled, you will likely get an instant notification. So had my new credit card company asked Trans Union or Equifax for my credit file rather than Experian, services that monitor those companies would also have notified me either immediately or very soon after my application.
Now how come all the monitoring services took about a month to notify me that a new credit account had been added to my credit file? It is common practice in the industry for credit grantors to only let the credit bureaus know of a new account after the first statement is rendered. And that is typically close to a month after the account was actually opened.
So, what does all this mean for you? The best protection against anyone applying for credit in your name is to lock or freeze your credit file at all three credit reporting agencies. But if you want an early warning whenever anyone, including yourself, applies for credit in your name, you need all three bureaus to be monitored with one service (a three-bureau report) or a combination of ID theft protection services.
