Image: Credit card © Mike Kemp, Getty Images,

For years, I've been telling you that credit monitoring is a waste of money for a lot of people.

Then I signed up for a credit-monitoring service.

For several months, I've watched my credit scores bounce around and fielded alerts about changes to my credit reports. I've learned a few things. And I've come to a new conclusion: Credit monitoring is a waste of money for the vast majority of people.

Here are my biggest beefs about credit-monitoring companies:

1. They lie

Many of these companies tout "free" credit scores, and some even try to pretend they're the official, federally mandated site that offers free credit reports. (The real site is, by the way. The one and only.)

Way too many readers tell me they had no idea they were signing up for credit monitoring until the charges started appearing on their bills. If a credit-monitoring company gives you free scores, here's the scoop:

  • They're probably not the FICO scores that most lenders use.
  • Or you're signing up for credit monitoring that isn't free.
  • Or both.

Liz Weston

Liz Weston

If the scores you're getting don't say they're FICOs, they aren't FICOs -- they're something else, and they may not be scores that any lender uses.

2. They lie, part 2

When companies actually are upfront about what they're selling, they often advertise credit monitoring as identity-theft "protection." Credit monitoring doesn't protect you from identity theft any more than an ice pack protects you from getting been punched. It may help a bit afterward, but it doesn't prevent the blow.

Credit monitoring won't stop bad guys from taking over your credit cards or establishing new accounts in your name. At best, it will give you an early warning that the damage has been done. The "insurance" policies many monitoring companies offer are essentially worthless, since most people who are victimized face few, if any, out-of-pocket expenses.

3. They're expensive for what you get

You typically pay $15 to $20 a month, or up to $240 a year, for credit monitoring. That's a sizable chunk of change for many households. For that kind of money, you should get something significantly better than what you can get on your own for free. Most of the time, you don't. Many companies don't watch your reports at all three credit bureaus, and not all creditors report to all three bureaus. That leads to gaps in what's being monitored.

Also, creditors can be pokey in reporting changes, especially new accounts, to the bureaus, so you might not be getting as much of a head start on cleaning up any problems as you think.

4. They're confusing

The one rationale I thought might hold up was the idea that following the gyrations of your credit scores could help you better understand how credit scoring works. In reality, not so much.

For one thing, you're probably not seeing the FICO scores lenders use. Most credit-monitoring companies offer "consumer education scores" or VantageScores that are created from different formulas and that react differently than your FICOs do.

Even if you're using the service that offers actual FICOs, you may not glean much from short-term movements of your scores. Here's just one example: The FICO formula is set up so you can improve your scores over time by paying down your credit card balances. Higher balances can hurt your scores. But in watching my FICOs, I noticed sometimes they went down when my balances rose, and sometimes they didn't.

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In actuality, what's happening with your scores depends on a lot of different factors, and FICO keeps the exact details of its formulas a secret. So you can't predict precisely how any given action will affect your scores, or by how much. Trying to reverse-engineer it from the back end, just by watching your scores bounce around, is unlikely to increase your understanding. If your primary concern is improving bad or mediocre credit, you may be better off buying your scores from for $20 each once every few months and following the detailed advice the site gives on how to improve your numbers.