DOLLARS AND SENSE

Common sense answers to questions on personal finance

by Joe Plemon

Q: I have heard of companies who will monitor your credit report or help you freeze your credit. Are these companies legitimate? Do you recommend hiring them?

A: Some of the companies are legitimate, but I don’t recommend hiring them because these are things you can do on your own. It is a simple thing to monitor your own credit report and it doesn’t cost a penny. You can use www.annualcreditreport.com for a free annual review of your credit history. Because there are three credit bureaus, you can get a free report every four months from one of these bureaus. If someone is using your identity, you will see purchases which you didn’t make or new accounts that you didn’t open. In this event, take four actions: place a fraud alert with the credit bureau, dispute the fraudulent accounts, file a police report and contact the Federal Trade Commission at www.ftc.gov/idtheft or 877-ID-THEFT. A credit freeze locks your data at the credit bureau so no one else can see it. A credit freeze must be requested in writing to all three major credit bureaus and will cost $10 for each bureau. The primary advantage of a credit freeze is that if someone is trying to open a new account with your identity, the creditor will not be able to check your credit (because it is frozen) and therefore will not allow the new account to be opened. A secondary advantage is that you will not be able to borrow money unless you “unfreeze” your file, which will cost you another $10 for each of the three major bureaus. I like this second advantage because the more difficult you make it for yourself to borrow money, the less likely you are to take on debt. A credit report is like an alarm: it notifies you when someone has already broken in. A credit freeze, however, is like a super deadbolt lock: it keeps criminals out. I recommend both.

Joe Plemon is a Certified Financial Counselor. Email your questions on personal finance to Joe at This e-mail address is being protected from spambots, you need JavaScript enabled to view it .