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Web Sites Offer Free Credit Monitoring

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Credit Sesame, a Web site that helps people manage their credit, has begun offering its users free credit monitoring, a service that big credit bureaus offer for a fee.

The service, however, monitors information from a single credit bureau, Experian, one of the three big credit-reporting agencies (along with Equifax and TransUnion).

This year another credit Web site, Credit Karma, began offering free credit-monitoring services to its users using data from TransUnion. More than four million of the site's about nine million members use the service, a Credit Karma spokeswoman said.

Monitoring of information at all three bureaus still generally requires paying a fee to one of the big three.

Consumers can get a free report each year from the three bureaus by going to annualcreditreport.com, but the monitoring services offer more frequent updates.

Credit-monitoring services are pitched as a way to help consumers easily keep track of changes — like new-account inquiries from lenders or changes of address — that might influence their credit scores, which is based on information in the credit reports. The notifications, sent by e-mail or to a phone via a mobile app, can also serve as a warning of possible identity theft or financial fraud.

"You could be getting an alert any day, any time, depending on what happens on your credit report," said Adrian Nazari, Credit Sesame's founder and chief executive. He said the service tracked 40 separate events; users could select the ones for which they wanted notification.

Mr. Nazari said the site was paying Experian for access to the data but offering the service free to users as part of its mission to help them improve their financial picture and manage their credit. Credit Sesame makes money by pitching loans to customers; it gets a fee if an application closes.

Experian offers consumers a credit-monitoring service for $14.95 a month that tracks information at all three major bureaus.

Credit Sesame already was offering its users free credit scores from Experian. The scores aren't FICO scores, which are the most widely used by lenders, but rather Experian "national equivalency scores," which Credit Sesame says can still give consumers a good idea of what their FICO score is and how their credit is trending.

The variety of credit scores available is one area being reviewed by the Consumer Financial Protection Bureau. The bureau recently put out a bulletin notifying consumers that the credit score they buy from the credit bureaus may differ from the score that lenders actually see.

Do you use a credit-monitoring service? Would you be more likely to use one if it were free?

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