Are Credit Monitoring Services Worth It?

Keeping a close eye on your credit activity can be worthwhile — whether you’re working to build your credit score or worried about your financial information falling into the wrong hands.

Identity fraud is an ongoing concern in Canada. In fact, nine in 10 Canadians (91%) expressed some level of concern about people using personal online information to attempt to steal their identity. Nearly half (47%) said they are extremely concerned about identity theft in a 2022-23 survey by the federal Office of the Privacy Commissioner.

For Canadians interested in taking more than just an occasional look at their credit report, a credit monitoring service may be a way to achieve extra peace of mind.

Deciding if credit monitoring is right for you starts with knowing more about the providers, benefits and costs involved.

What is credit monitoring?

Canadians can already get a copy of their credit report for free and review it at their leisure — something everyone should do at least once a year.

Paying for a credit monitoring service allows you to automate this review process. You’ll receive an alert if new credit inquiries or accounts are added to your credit report, if your credit score changes, or even if personal details change.

How credit monitoring works

By providing regular and timely notification of any changes to your credit report, credit monitoring can prompt you to take swift action if fraudulent activity is suspected. It can also enable you to see your progress, if you’re working on building or repairing your credit.

For example, if a lender makes a ‘hard inquiry’ on your credit report because a loan application is submitted in your name, a credit monitoring service will notify you. If you didn’t apply for the loan, the alert gives you a chance to follow up quickly with the lender and the credit reporting bureaus.

Nerdy Tip: Canada’s two major credit reporting bureaus — Equifax and TransUnion— both offer subscription credit monitoring services. Other private companies like IDShield, ID Assist and Telus also offer credit monitoring, alongside other identity theft protection services.

Credit monitoring cost

In Canada, fees for credit monitoring typically range from $10 to $24.95/month for individuals — sometimes starting with a 30-day free or discounted trial — and it can be purchased via the providers’ websites.

Some banks and credit unions also provide credit monitoring services as an optional add-on subscription, sometimes at no charge to account holders.

Credit monitoring features

Forty-three percent of Canadian consumers said they use credit monitoring to learn how to manage their credit scores, according to a 2023 global survey conducted by TransUnion. Thirty-seven percent of Canadian consumers said credit monitoring gave them visibility into changes on their credit report, while 30% said they use credit monitoring to detect fraud.

In addition to fraud alerts, a subscription-based credit monitoring service will generally allow you to check your credit report and score as frequently as you like.

Depending on the provider, credit monitoring may be offered alongside services that scan fraudulent websites for your compromised personal information, identity theft insurance coverage, lost wallet assistance or help with identity restoration.

Nerdy Tip: Subscribing to a credit monitoring service will not affect your credit score, as it’s considered a ‘soft inquiry.’

What credit monitoring doesn’t do

Ultimately, credit monitoring just alerts you to new activity on your credit report. It won’t actually prevent someone from conducting fraudulent activity using your banking information or social insurance number, for example. And credit monitoring alone won’t improve your credit score, only the smart use — and repayment — of credit over time can do that.

Who should pay for credit monitoring?

A credit monitoring service may be a good option for individuals who are concerned their personal information (name, financial information or social insurance number) has been compromised in a data breach or who have had a lost or stolen credit card. With constant monitoring and new activity alerts, you can react quickly if you receive notification of unusual or unexpected changes.

Credit monitoring may also be useful if you’re building your credit or are keeping close tabs on your credit score in anticipation of applying for a loan or credit card in the near future. Being able to see progress in real time is a great motivator.

Alternative ways to monitor your credit

If a paid credit monitoring service isn’t the right move for you, there are other ways to keep an eye on your credit activity.

You can request a free copy of your credit report from the credit bureaus online, or in person, by phone or by mail. Both Equifax and TransUnion provide free access to credit reports online.
You can access free credit monitoring via fintech companies like Borrowell and Credit Karma, but know that these providers may use your information to advertise financial products to you.
As part of your banking package, your financial institution may offer free access to your credit score, provide a monthly credit report and even alert you to changes.
You can also place an identity alert on your credit report. For residents of Ontario and Manitoba, this requires lenders to call you before extending credit. For residents of other provinces or territories, lenders are encouraged to call before extending credit.