The Best Credit Monitoring Services in Canada: How to Use a Credit Alert to Protect Against Fraud
A strong credit score and report are essential to your financial health. It not only ensures access to credit, but it also helps you get lower interest rates when you borrow, makes it easier to rent a house or apartment or buy a cellphone on a contract. Unfortunately, your credit report can be compromised by identity theft and credit fraud, which is more prevalent today than ever before.
Thankfully, checking your credit report often can protect you against fraudsters. One of the easiest ways to do this is by signing up for a credit monitoring service. But what is credit monitoring, and how does it work?
How Does Credit Monitoring Work?
A credit monitoring service keeps tabs on your credit information regularly and sends you an alert anytime there is a change you should be aware of. Examples include a new credit account that’s opened in your name or a late payment reported by a credit issuer on your bureau. In most cases, this activity will be perfectly valid, but if it isn’t, you’ll be the first to know about it.
Benefits of a Credit Monitoring Service
The primary benefits of a credit monitoring service are convenience and peace of mind. Companies like Borrowell and Credit Karma and the main credit bureaus allow you to check your credit report regularly.
But that can be time-consuming. Credit monitoring automates the process by sending alerts directly to your email inbox. That way, you don’t have to think about your credit continually, and you can have peace of mind knowing you’ll be notified if anything does go sideways.
If you do happen to fall victim to identity theft and your credit is impacted, you’ll be able to address it immediately instead of finding out months or even years down the road.
Identity and Fraud Alerts
If you’ve been the victim of ID theft or there has been an attempt at fraud on one of your accounts, there are two types of alerts you can set up with the credit bureau to protect you.
An identity alert adds a phone number to your Equifax credit report. It tells creditors that before they extend credit to you, they should call you for authorization. In fact, in two provinces – Ontario and Manitoba – the Identity Alert makes it mandatory for creditors to contact you directly. Elsewhere, it’s just encouraged.
A fraud alert is placed on your credit report as a way of letting creditors know that you may have been a victim of identity theft or fraud. When lenders see this message, they will usually take additional steps to make sure you are the person applying for credit.
You can set up identity and fraud alerts with Canada’s two main credit bureaus, Equifax and TransUnion. If you need to place a fraud alert, you’ll need to contact each bureau separately, as they don’t share these alerts.
Examples of Fraud
You may be wondering what situations qualify as fraud to set up a fraud alert with the credit bureau. Here are a few situations to look out for:
- A transaction you did not initiate or authorize has gone through on your bank account.
- Your bank informs you of a fraudulent transaction on your account or an attempt at fraud.
- The police contact you to inform you that there is a confirmed fraud in your name.
- You review your credit report and see accounts or entries that you don’t recognize.
Credit Monitoring vs. Credit Alert
While the terminology can differ between banks and credit bureaus, credit monitoring refers to a specific service I’ve outlined above that keeps an eye on your credit report and alerts you anytime there are any material changes or suspicious entries.
On the other hand, a credit alert, otherwise known as a fraud alert, is a warning placed on your bureau for your creditors to ensure they use the proper due diligence before extending any new credit in your name.
How Much Does Credit Monitoring Cost?
Credit monitoring can be expensive. While pricing varies between service providers, the average cost is between $15 and $20/month, with some providers offering a free trial period. I’ll cover pricing in my review of credit monitoring services below.
Who Offers Credit Monitoring Services In Canada?
Canadians have a few options when it comes to setting up credit monitoring. The following is a list of some of the top providers, complete with pricing.
Equifax – Complete Advantage Plan
Chances are, you’re familiar with the name Equifax. Equifax is one of two credit bureaus in Canada, the other being TransUnion. Equifax offers credit monitoring services at three price points. The Equifax Complete Advantage Plan ($16.95/month), Equifax Complete Premier ($19.95), and Equifax Complete Friends and Family ($29.95). Included in the plans is identity theft insurance of up to $50,000.
TransUnion Credit Monitoring
TransUnion offers a similar service to Equifax for $19.95 per month. When you sign up, you’ll receive unlimited updates to your credit score and credit report, email updates of any critical changes to your credit report, a personalized debt analysis, and up to $50,000 of Identity theft insurance.
Credit Card Credit Monitoring
Some banks and credit card companies offer credit monitoring for a fee. For example, RBC offers a service through a 3rd party provider called FirstReport. There’s a 30-day free trial, after which the price is $19.95/month, in line with the credit bureau offerings.
Where Can I Get a Copy of My Credit Report?
You can obtain a free copy of your credit report from the credit bureau or by registering with Credit Karma or Borrowell. I’ve placed links to each of these sources below.
You can sign up for a free Borrowell account online and receive a copy of your credit score and report directly to your inbox every week for free. While Borrowell doesn’t offer automated, paid credit monitoring services like Equifax and TransUnion, you can easily stay on top of your credit report by logging in every week.
Borrowell makes money by offering members credit cards and consumer loans from different lenders across Canada. You will receive these offers when you login, but there is no obligation to apply.
Credit Karma has a similar set-up to Borrowell in that they make money through affiliate relationships with credit card companies and loan providers. Still, their credit reporting service is entirely free. Unlike Borrowell, which uses your Equifax credit report, Credit Karma pulls your information from TransUnion. For this reason, you may want to consider signing up for both services to get the most precise picture of your credit report.
You can get a free Equifax credit score and report online or by mail. The online report includes a summary of the factors impacting your score and lets you contact an Equifax consumer relations agent seven days per week.
To receive your report by mail, you’ll need to download a credit report request form and complete all of the Personal Information sections required fields. You will also need to attach copies of government-issued-ID and a separate document confirming the name and address on the ID, i.e., Hydro, Phone, or Cable statements).
Like Equifax, TransUnion is mandated by federal consumer reporting legislation to offer a free credit report to anyone who requests one. TransUnion refers to this as a Consumer Disclosure. It includes all inquiries on your credit report. It can be accessed online, by mail, or in person.
Final Thoughts on Credit Monitoring Services
At this point, you have a better understanding of how credit monitoring services work, but you may be wondering if the service is worth the price. It comes down to what you’re willing to pay for. If you sign up for Borrowell or Credit Karma, your credit report is emailed to you every week, which allows you to check things out for yourself for free. This is the option I prefer.
Paying for credit monitoring automates the process, which means you don’t have to do any digging; the alerts are sent directly to you. If paying for that extra level of security and convenience is worth it to you, then it’s money well spent.