Many people ask about how credit monitoring service and a security freeze can protect them against identity theft. They also wonder whether one is better than the other and which one will help them in their situation.
The answer is that both security freeze and a credit monitoring service protect from identity theft although differently.
A security freeze prevents someone using your credit report to open new accounts in their own name using your identification information. Since the lender will not be able to access your credit report, such an application for credit by a fraudster will not get approved.
Credit monitoring service keeps you aware of any activity happening on your credit report which includes new accounts being added and enquiries being made. If someone is trying to steal your existing accounts to make a change in the address, you will see it in the credit monitoring reports. If someone adds a new account to your credit history that you did not open you will be able to see it. If you see an enquiry for a credit application that you did not make then you can be appraised and informed in advance by the credit monitoring service.
However, the most kind of identity theft and fraud involved stealing your information and making charges to your account. For example, some one making an unauthorized charge to your credit card. This kind of identity theft and fraud will not be prevented by either credit monitoring or placing a security freeze on the credit report. This kind of an identity theft and fraud can only be prevented by careful monitoring of your monthly credit card bill and notifying the credit card company of any unauthorized transactions that you did not make. Most of the credit card companies offer a consumer protection that covers the consumer against such fraudulent and unauthorized transactions.
A security freeze on the credit report is generally not recommended due to the reason that many times you may not foresee a situation where a vendor may need to access your credit report. It could be something as simple as getting instant credit at a departmental store. If you are comfortable with going through the process of lifting your security freeze every time you expect to be making an application for credit or any other purpose for which access to your credit report will be required, then security freeze on your credit report may be the right option for you.
However, if you feel that being able to monitor the changes happening on your credit report on a frequent basis is protection enough to you against identity theft and fraud then credit monitoring may serve the purpose beautifully as well.