Credit Monitoring vs. Identity Theft Protection: Which Is Best?

In January 2023, Bryan Alan Sparks was sentenced to eight years in prison. The Seattle man used stolen personal information from over 50 victims to swindle nearly $2 million in federal funds. One victim claimed that his credit score plunged by 200 points after Sparks opened multiple fraudulent accounts in his name [*]. 

The scary truth is that cases of both identity theft and fraud have soared in recent years. 

In 2022, identity fraud losses cost victims $20 billion [*]. New account fraud — when scammers open bank accounts or get a new credit card in someone else’s name — grew by 32% [*]. If you fall prey to this or other types of identity fraud, you may struggle to get a loan, start a business, or buy your dream home. 

If you’re concerned about identity theft and fraud, you’re probably at least somewhat familiar with both identity theft and credit monitoring protection.

But which one is right for you and your needs? 

In this guide, we’ll compare credit monitoring vs. identity theft protection so that you can choose the best plan for you and your family.

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Credit Monitoring vs. Identity Theft Protection: What’s the Difference?

Credit monitoring tracks consumer credit files with the three major credit reporting agencies — Equifax, Experian, and TransUnion. These services send you automated alerts if any suspicious activity is detected. For example, you'll get a notification if a fraudster applies for a credit card in your name. 

Identity theft protection includes tools that monitor your personal information across public records, the Dark Web, and more. For example, identity theft services can alert you if your Social Security number (SSN), driver's license, passport number, name, or address have been leaked in a data breach. 

In addition, modern identity theft protection providers offer credit monitoring, digital security tools like antivirus software and a virtual private network (VPN), along with 24/7 support from fraud recovery specialists and, typically, $1 million in identity theft insurance.

Here are the key differences between credit monitoring and identity theft protection:

The Federal Trade Commission (FTC) investigates identity theft and fraud in the United States. If you believe somebody is using your personal information for fraudulent activity, submit an official report to the FTC at IdentityTheft.gov.

But what if you want to be more proactive? 

You can take control over your finances when you choose between credit monitoring and identity theft protection. Let's compare these two services in more detail.

What Are the Pros and Cons of Credit Monitoring?

Credit monitoring services help you keep tabs on your credit report with automated transaction alerts, fraud warnings, regular credit score updates, and free credit reports. 

However, you can monitor your own credit by requesting a free credit report from each of the three major credit bureaus by visiting AnnualCreditReport.com — as long as you have the time to look for signs of fraud manually. 

By comparison, the constant surveillance and quick alerts of three-bureau credit monitoring services provide a complete picture of your credit history — directly from a mobile app. 

Here are the pros and cons:

What are the benefits of credit monitoring?

• 24/7 monitoring of your credit reports at all three bureaus: This widespread, constant coverage helps you catch any signs of fraud early — before criminals damage your credit score. 
• Regular credit score updates: A strong credit score is crucial when you need a mortgage or car loan. With updates about changes in your score, you can make smarter decisions regarding credit applications. A change in your credit score can also be a warning sign of identity theft.
• Fast fraud alerts: Quick alerts can save you lots of time and money. The sooner you find out about fraud, the sooner you can stop criminals from exploiting you. 

Note: Not all credit monitoring services notify you in near real-time. Aura has direct connections with all three credit bureaus, meaning you receive alerts up to 250x faster than you would with other services³. 

💡 Related: The 7 Best Credit Monitoring Apps (Android and iOS) →

What are the potential cons of credit monitoring?

• Limited coverage: Credit monitoring only tracks changes to your credit report — but it won't stop fraud. If thieves steal your wallet or buy your stolen credit card numbers on the Dark Web, they could drain your bank account without impacting your credit report. 
• Cost: Most credit monitoring providers charge for a monthly subscription. This fee may be a little expensive, considering the limitations of these services.
• Prohibits legal action: Many companies offer complimentary credit monitoring after they suffer a data breach. But if you use their services, you may not be able to pursue legal action against the company later.
• False sense of security: Credit monitoring alerts aren't magical remedies for fraud. Some credit monitoring services only keep tabs on one or two of your credit reports. Others are slow to report changes. Hackers can quickly exploit you after a data breach if you don't have strong passwords and digital security tools in place.

What Are the Pros and Cons of Identity Theft Protection?

Identity theft protection prevents unauthorized people from using your personal and financial information, and warns you if you’re vulnerable. 

Typical features include credit monitoring, ID theft protection and monitoring, antivirus software, a virtual private network (VPN), and a password manager.

What are the benefits of identity theft protection? 

• Dark Web Monitoring: Criminals trade stolen personal information on hacker forums for as little as $2 [*]. You can use Dark Web monitoring to receive alerts if any of your personal information is at risk — including your SSN, bank accounts, or phone number. 
• Antivirus, VPN, and Safe Browsing tools: Hackers target your personal data and use it to steal your identity or break into your online accounts. Tools such as antivirus software, a military-grade VPN, and Safe Browsing software proactively protect you against hackers and online scammers. 
• Privacy assistant: Minimize the risk of scams by removing your personal details from data broker lists. Aura scans over 20+ data broker sites and makes removal requests on your behalf.
• Parental controls and child identity theft protection: Children might unwittingly disclose sensitive personal information online, such as your home address or credit card number. Take control of how your kids use the internet with screen limits, content filters, and advanced privacy settings. Children are also common targets of identity theft. Many tools can monitor your child’s SSN to make sure it hasn’t been leaked online.

What are the potential cons of identity theft protection? 

• Not all fraud is covered: When a thief applies for a payday loan in your name, it raises an alarm. But some providers can’t help you detect certain types of fraud, like employment identity theft or tax refund scams. That’s why it's essential to shop around for the right provider.
• Cost considerations: Most identity theft protection services offer monthly or annual paid plans. If you have a large family, the monthly costs can surge past $30. 
• False sense of security: As with credit monitoring, users can become complacent online if they have identity theft protection. While these services offer the best ways to protect your financial life and identity, you still need to maintain good cyber hygiene to stay safe from hackers and fraudsters. 

💡 Related: Aura vs. LifeLock (2024 Showdown and Comparison) →

What does identity theft insurance cover?

Most identity theft protection services offer some form of insurance. 

Identity theft insurance helps victims recover from the financial and emotional impact of fraud. Americans are 50% more likely to have their identities stolen — so getting insurance coverage is a smart move [*]. 

Identity thieves often use stolen personally identifiable information (PII) to apply for loans or credit cards in the victim's name. Debt collectors could arrive at your door, and you may face huge bills for unpaid credit card debts. 

If you fall prey to identity theft, you may need to spend a great deal of time and money to dispute the fraud and restore your financial reputation. 

Identity theft insurance ensures that you have coverage for eligible losses related to identity theft. For example, you can get reimbursement for stolen funds, lost wages, and costs associated with replacing identity documents and paying legal fees.

💡 Related: Is Kroll Identity Monitoring Legit? What You Need To Know →

How To Choose Between Identity Theft Protection and Credit Monitoring

You now have an overview of both types of services, but which is best for you? 

When considering credit monitoring vs. identity theft protection, the right choice depends on your needs and budget.

Who should have credit monitoring?

Credit monitoring is for people who only want to keep track of their credit scores and find out quickly about any changes in their reports. 

You should consider credit monitoring in the following situations:

• You have multiple loans or lines of credit. It's not easy to stay on top of several accounts. Credit monitoring gives you an overview of your credit report. This insight helps you quickly spot and react to any discrepancies or fraudulent activity.
• You plan to make large financial transactions. Major outlays for a car, wedding, or house usually involve borrowing money. With credit monitoring, you can make more informed decisions. Also, you can maintain a strong credit score to curry favor with lenders. 
• You get offered free monitoring by a company. It's good practice to check your credit report periodically. Use free services whenever possible if you don't want to pay for credit monitoring. But remember the catch with complimentary services: If you accept support from a company that has suffered a breach, you probably won't be able to join class action lawsuits against the company later. 

💡 Related: Is Credit Monitoring Worth It? How To Decide →

Who should have identity theft protection?

The best identity theft protection helps many types of people. You can use these tools to secure your personal information, financial reputation, and online accounts.

You should consider identity theft protection in the following situations:

• Your personal information has been leaked in a data breach. Identity theft protection services warn you if your sensitive details are exposed— for example, your phone number or email address. Also, leading providers include a password manager. This application makes it easy to update compromised login credentials. 
• Your identity has been stolen in the past. There’s a 50% chance that a victim of identity theft will be targeted again [*]. A proactive approach with a reliable digital security company will help you avoid future incidents. It's important to be vigilant to minimize the damage caused by further scam attempts.
• You have multiple or sizeable assets that you want to protect. Criminals target wealthy people with significant assets, like real estate holdings or large investment portfolios. You can safeguard your assets and savings with identity theft protection. 
• You’re active online. Online shopping, social media, and remote work can expose your personal information every day. You're most at risk when you use unsecured public Wi-Fi. Robust cybersecurity features like a VPN and Safe Browsing tools reduce your digital footprint and minimize the risk of account takeovers.
• You are worried about elderly family members. Cybercriminals and con artists prey on senior citizens. Many older people have considerable wealth but lack tech-savvy awareness online. Identity theft protection can secure your parents’ (or grandparents’) data. Also, Safe Browsing tools prevent them from falling for social engineering scams like phishing emails. 
• You want to protect your children. Kids are prime targets for fraudsters because of their pristine credit scores. Identity thieves can masquerade with a child's identity for years. It's possible for a scammer to destroy your children's credit scores before they become adults — with the fraud being discovered only when your kids apply for college loans or seek employment. You can secure your children's financial futures by hiding their personal information online, monitoring their SSNs, and placing credit freezes on their lines of credit. 

💡 Related: How To Protect Your Child From Identity Theft →

The 5 Best Identity Theft Protection Services in 2024

1. Aura
2. Identity Guard
3. LifeLock
4. IdentityForce
5. IdentityIQ

Many identity theft protection services include credit monitoring (for the same price as a stand-alone credit monitoring service) — making them the best option for keeping your assets and identity safe. 

Here are our picks for the top five identity theft protection services:

1. Aura: Best all-in-one protection

Aura provides an all-in-one solution that combines identity theft protection with three-bureau credit monitoring, the industry’s fastest fraud alerts, powerful digital security tools, comprehensive 24/7 Fraud Resolution support, and generous insurance coverage.

While a relatively new name in identity theft protection, Aura has already won awards and been rated highly by Money.com, Forbes, Security.org, and more. Aura also holds a 4.6-star rating on Trustpilot from nearly 200 independent reviews [*].

Aura pros and cons:

Note: Aura’s family plans offer the most coverage of any identity theft protection service, including protection for up to five adults and unlimited children (even in different households). You’ll also get up to $5 million in identity theft insurance — $1 million per adult on your plan.

2. Identity Guard: Affordable and flexible protection

Identity Guard has been a household name in identity theft protection for decades, helping protect more than 38 million Americans against identity theft and fraud.

Identity Guard pros and cons:

💡 Related: Is IDNotify Worth It? What To Know Before You Buy →

3. LifeLock: Industry veteran (with a few issues)

LifeLock is one of the most well-known names in identity theft protection — however, it’s come under fire in recent years for sky-high renewal rates, exposing customer data in a recent breach [*], and poor customer service [*].

LifeLock pros and cons:

💡 Related: The Top 10 LifeLock Alternatives (and How To Choose) →

4. IdentityForce: Good (but expensive) option for families

IdentityForce — owned by TransUnion — offers two different plan options, depending on whether you want identity theft protection on its own or combined with credit monitoring. It’s important to note that even IdentityForce’s most basic plan is significantly more expensive than other options out there — and with more limited features.

IdentityForce pros and cons:

💡 Related: IdentityForce vs. LifeLock — Which Option Is Best in 2024? →

5. IdentityIQ: Best basic and affordable protection

IdentityIQ provides all-in-one digital security through a partnership with Bitdefender. Unfortunately, like LifeLock and other providers, you have to choose one of its most expensive plans to get three-bureau credit monitoring, digital security tools, and fraud restoration support.

IdentityIQ pros and cons:

The Bottom Line: Credit Monitoring Alone Won’t Keep You Safe

Getting real-time alerts about unauthorized activity on your credit report is useful. But with credit monitoring alone, you won't have any coverage against the financial repercussions and long-term damage of fraud.

The truth is, even the best credit monitoring is not enough to safeguard you and your family in 2024. Identity theft protection offers significantly more features and security than a stand-alone credit monitoring tool. And what's more, you can get everything you need at a similar price. 

Aura keeps you safe from hackers, scammers, and identity thieves. Every Aura plan includes:

• 24/7 three-bureau credit monitoring: Receive rapid fraud alerts up to 250x faster than other digital security providers.
• VPN and Antivirus software: Protect your devices against malware, spyware, and ransomware threats.
• Dark Web monitoring: Aura scans the internet and sends instant alerts if any of your credit card information or personal data is circulating on hacker forums or illicit marketplaces.
• $1,000,000 insurance policy: Get coverage for eligible losses due to identity theft, such as stolen money, legal fees, credit cards, and passports.
• White Glove Fraud Resolution Specialists: Access 24/7 support from U.S.-based experts who help you navigate challenges with banks, creditors, and government agencies.

Keep your identity (and finances) safe from scammers. Try Aura free for 14 days.