INDIANAPOLIS (WISH) — Credit scores can be a source of anxiety for many people.

The three-digit number, which can determine access to housing, loans, and even car insurance rates, has many Americans on edge.

But, is this concern justified, or are consumers being manipulated into unnecessary expenses and anxiety?

Emily Stewart, a senior correspondent for Business Insider, describes this phenomenon as a “weapon of mass induction.” In a recent interview on “Daybreak,” Stewart explained how companies profit from the fear surrounding credit scores.

“Credit scores are obviously quite nerve-wracking,” said Stewart. “You need them to get a house, an apartment, and even for car insurance. Companies know we are anxious about our credit scores, and they offer all sorts of services to monitor or fix them.”

The big business of credit monitoring

The credit monitoring and identity theft protection industry is worth around $5 billion, Stewart said. Companies such as Experian, one of the major credit bureaus, are tapping into this market by offering monitoring services for a monthly fee. Stewart recalled her experience of being bombarded with emails from Experian after signing up for an account for her reporting.

“They were offering me this credit monitoring service for about $25 a month,” Stewart said. “I reached out to some consumer advocates and asked, ‘Do I need this?’ And what they said was eye-opening.”

Most identity theft occurs through existing accounts, such as stolen credit card numbers, which credit monitoring won’t catch, Stewart noted. Furthermore, credit monitoring often informs you only after the damage is done, offering little practical benefit. “A lot of these advocates will say it’s pretty ineffective and expensive for a service you’re not going to necessarily benefit from,” Stewart added.

Stewart pointed out that consumers can freeze their credit for free, a safer and more effective option in the age of data breaches.

Beware of credit repair scams

Stewart also warned against companies offering “credit repair” services, where consumers pay to have negative items disputed on their credit reports. She said these services often dispute all negative items, even those that are legitimate, which can leave consumers out of pocket with little benefit.

“There’s a sense that you don’t want to bury your head in the sand, but you can relax a little bit,” Stewart said. “You can access your credit report now for free every week if you want. Maybe treat it like your 401k—check once a quarter or once a month.”

She emphasized that while it’s important to stay informed, consumers should avoid getting too worked up about their credit scores. “This isn’t your SAT score,” she said. “Maybe just relax a little bit.”

Takeaway

As concerns about identity theft and financial security continue to grow, Stewart’s advice is to be cautious and informed about credit monitoring and repair services. Freezing your credit is a viable option, and regular, but not obsessive, monitoring can help maintain peace of mind without unnecessary costs.

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