LifeLock is an identity theft protection product that relies on the promise of shielding your identity from being utilized by identity thieves. However, one common query that is frequently asked is if LifeLock services can adversely affect your credit score. What follows is a brief on how LifeLock operates and the possible effects it could have on your credit profile.
How LifeLock Works LifeLock keeps track of the information that you have and notifies you if you may have to protect your identity. In particular, it monitors for such activity that may suggest the person is trying to create accounts on your behalf, change active accounts, or access other information such as your Social Security account.
If LifeLock perceives any suspicious activity it will alert you then you can take further necessary steps to prevent the attempt at identity theft. Additionally, LifeLock also offers help with the restoration process of any identity theft that may occur if your information is ever sold.
It is also important to note several things about LifeLock based on the information provided above:
- It searches for credit checks on your behalf in public and private databases. This makes it possible for it to notify the consumer when the applications for credit or services are to be made.
- If needed, LifeLock extends up to $1 million for stolen identity event expenses, attorneys, and specialists.
- If you ever fall victim to identity theft while being under membership of LifeLock, what you need is the ID restoration specialist who works round the clock to help repair the damage.
- Additional services that are offered by LifeLock include a one million dollar service assurance, bank, and credit card activity notification, executive summary of credit reports and scores, and verification of address change.
It is highly improbable for LifeLock to jeopardize one’s credit since its services are designed to protect consumers’ credit information. Having this understanding of how LifeLock works, the next considerations are if the services offered could in any way harm your credit reports or credit scores.
There are a few key points on this topic:
- Monitoring – LifeLock does an adequate job of monitoring credit reports to ensure that no activity is considered fraudulent. However, if the companies in question check your credit for account monitoring similar to this one, it is not a hard inquiry. Soft inquiries are not as adverse in their impact as hard inquiries since they do not lower one’s credit scores or show up on the credit reports that lenders access. Therefore, the monitoring that LifeLock performs including credit checks will not affect your credit rating in any way.
- Application Alerts - LifeLock advises members to file first-time and subsequent 90-day fraud alerts to credit bureaus to inform lenders to perform additional checks before offering credit. This may raise concern that credit access could become more challenging and while this may be true, credit grantors have to follow the law when conducting verification processes during the fraud alert. First, the 90-day fraud alert placement means that consumers are allowed one free credit report from each credit bureau. It is usually advised to retain fraud alerts today since the identity theft risks are still very much a concern.
- False Positives – As you can imagine with LifeLock running constant checks for alterations to our data, they sometimes mistake it for a change in activity. If one has to go through some of the processes of denying the wrong fraud allegations several times, some fear that even this process makes it more cumbersome to acquire rightful credit when one desires to. This can not be highly damaging though it does not seem to have much effectiveness when contrasted with the fundamental protection services offered by LifeLock in matters of actual identity theft.
- Credit freezes – In some circumstances, LifeLock recommends its members make credit freezes that prevent access to credit reports or the establishment of new accounts until the freeze is removed. It is also noteworthy that credit freezes can affect your capacity for receiving instant credit approval more significantly. However, they are also a good measure of protecting oneself from the various damages of identity theft affecting credit and financial status. It can be lifted temporarily when required for any credit applications to be made by members.
- LifeLock and Your Credit – The Takeaway Finally, while it is true that LifeLock does perform actions that are associated with your credit reports and credit accounts as a part of its identity theft prevention services, it is highly unlikely that the parts of the monitoring process that are essential for your protection will adversely affect your credit in the future or make it harder for you to obtain credit. The fraud shields currently available are designed to confirm your identity and not to prevent you from borrowing money. This is often true because most incidents of identity theft are normally nipped in the bud by the software’s ability to detect them and prevent them from getting to the next level, which is normally very hard to contain, outweighs the minor difficulties that may occur when using the software in an application.
About identity theft protection and insurance, which LifeLock offers, most financial analysts and specialists agree that such services are useful and necessary for keeping one’s credit profile healthy in the long run. The minor disadvantages that occur due to credit freezes or fraud alerts include time delays in approvals that they cause must be considered against the backdrop of identity theft ruining the scores and credit history in today’s world without these precautions.
Considering that identity theft costs consumers billions of dollars annually, most individuals foresee reasonable hurdles for criminals as quite worth the marginal drawbacks. All the credit bureaus involved, lenders, and identity protection firms also keep on enhancing the arrangements for handling fraud alerts and freezes that should have little or negligible influence on genuine credit operations while blocking fraudsters at the same time.
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