Without your consent, credit bureaus collect information about your personal finance history — whether you pay your loans on time, how much debt you carry, etc. This is their business model, and it allows lenders to assess a customer’s credit risk.
Then there was the 2017 hack at Equifax. The personal data of about 147 million people was exposed. Now, the company is trying to make amends in a settlement with the Federal Trade Commission.
But one of the touted remedies has people in a towering rage. And they should be.
Under the deal, if your data was exposed and you chose to get credit monitoring on your own, you were offered “up to” $125. However, not long after announcing the cash option, the FTC had to walk it back because of the stampede of people looking to receive the benefit and the limited pool of money — just $31 million — that had been set aside.
The push is now to get people to sign up instead for the free credit monitoring being offered by Equifax. This option comes with four years of credit monitoring at Equifax and the two other major credit bureaus, Trans-Union and Experian. Consumers can request an additional six years of free monitoring of just their Equifax credit report.
Considering that most people who still make a claim will get substantially less than $125, you may as well take the credit monitoring instead.
Paying for the three-bureau monitoring would cost you about $30 a month. Over four years, that would come to $1,440.
Still, even though it’s free, a lot of people are not sure the monitoring offer is worth it. Here are some questions I’ve received from concerned readers, and my responses.
Q: Why would I sign up for credit monitoring with a company that had a significant breach in their security?
A: Under the settlement, Equifax won’t be providing the three-bureau monitoring for the first four years. Instead, the company will pay its competitor, Experian, to provide the service. Equifax will handle the additional six years of monitoring, but the company has agreed to not upsell or directly market or advertise its fee-based products or services during that time.
Q: What assurances do I have that credit monitoring wouldn’t subject me to further vulnerability to fraud and theft?
A: Credit monitoring does not prevent fraud or identity theft. What it does is send you alerts about activity that could be fraudulent. Because we live in a time when lenders can grant credit in a matter of minutes, you might get a notification only after a card has been issued and used. But the sooner you’re informed about some nefarious action, the quicker you can move to close a fraudulent account in your name.
Q: As a government employee, I was affected by the hacks several years ago at the Office of Personnel Management. So I have free credit monitoring from the OPM. Thus, I am on the fence about getting the additional credit monitoring. Would the extra monitoring services be redundant?
A: In 2015, the OPM disclosed that it had been hacked twice. The personal information — birth dates, home addresses and Social Security numbers — of at least 22.1 million current and former federal government employees, contractors and their family and friends was compromised.
OPM has since been offering free credit monitoring for those affected. The service also includes monitoring at the three major credit bureaus. Last year, OPM announced it was extending the monitoring services through fiscal year 2026.
Like those affected by the OPM data breach, you may already be receiving free credit monitoring from another hack. However, make sure the service covers all three major credit bureaus. If it doesn’t, then I would recommend getting the free credit monitoring offered in the Equifax deal.
Also, check how long you’ll be getting the free monitoring. If it runs out before the coverage offered by Equifax ends, grab the extra protection. You only have until Jan. 22, 2020, to submit a claim under the Equifax settlement.
Q: If I have credit monitoring, can I still get a credit freeze?
A: With a credit freeze in place, potential lenders can’t review your file to grant new credit. A freeze won’t prevent companies providing credit monitoring from checking your files and sending you alerts, according to all three credit bureaus.
Q: My credit card company provides monitoring. So, I went for the $125, totally missing the “up to” piece of the deal. Can I change my mind?
A: You still have a chance to switch to free credit monitoring. Once the court approves the Equifax settlement, you’ll be contacted. At that time, you can let the settlement administrator know you’ve had a change of preference.
Michelle Singletary is a personal finance columnist for The Washington Post. Her column runs on Sunday.