Credit Monitoring vs. Credit Restoration: What's The Difference?

Recently, a friend asked me what the difference is between "credit monitoring" and "credit restoration." While writing this blog, I kept some notes which morphed into the comparison chart below:

	Credit Monitoring	Credit Restoration
Definition	The process of reviewing a consumer's credit reports and credit scores at the three national credit bureaus. May also includes alerts when a credit bureau provides the consumer's credit report to potential lenders.	A process of notifying law enforcement, credit bureaus, banks, lenders, state and local government agencies, federal agencies, and other companies about the theft of a consumer's identity and/or money; and the process of correcting the information in the victim's credit reports.
Advantages	1. Includes alerts via cellphone and/or via e-mail 2. Timely alerts minimize the amount of money stolen or damage done by identity thieves 3. Almost always provided for free for 1 or 2 years by companies that have had a data breach 4. Service usually includes the full text of your credit report from all 3 national credit bureaus 5. Service may include tips on how to improve your credit score and manage your credit	1. Professionals do the work a consumer may not have the time or knowledge to complete 2. The better services include both credit/financial and non-credit/criminal work 3. The better services do most or all of the restoration work as the victim's agent 4. May include an insurance policy to cover expenses and legal fees incurred 5. Sometimes provided for free for 1 year by companies that have had a data breach
Disadvantages	1. Monthly fees vary widely 2. Can be difficult to compare services 3. Many credit monitoring services don't include credit restoration services	1. Monthly fees vary widely 2. Can be difficult to compare services 3. Usually, insurance doesn't cover actual money lost or stolen 4. Often not included in many credit monitoring services
Availability	Provided by many banks, credit bureaus, and independent companies	Provided by some banks, but mostly by independent companies

Which is best? It really depends upon your personal situation. If you are unfamiliar with identity theft, then a comprehensive credit monitoring service probably is best. Several resources are listed in the right column under "Credit Monitoring Services." If you are a DIYer (Do It Yourself) who gets your free credit reports at www.annualcreditreport.com, then a credit restoration service may be best.

As things change, I will update the above chart.

Want to learn more? Read prior posts about credit-monitoring services. You probably will want to read about the Security Freeze and C.L.U.E. insurance report topics. I urge everyone to consider opt-out resources to reduce your identity theft risk.