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Free Credit Monitoring from PayPal

Please note: Equifax has discontinued this free credit monitoring service. Existing users will continue to receive credit alerts until January 31, 2008. PayPal is no longer accepting new signups for this service.

PayPal and Equifax informed its members in mid December. They have yet to issue a press release or otherwise publicly announce and explain their decision.

The pages on the PayPal web site now give generic "Page Not Found" errors. Search results for "Equifax Credit Alerts" on the PayPal site are redirected to an article titled "Understanding Identity Theft."

Knowzy will stay on top of this breaking story as it develops.

Here is the text of the e-mail Equifax sent to its members announcing the discontinuation of the service:

From:  Equifax
Sent:  December 17, 2007
Subject:  Equifax Credit Alerts for PayPal Users are being Discontinued

Dear Knowzy,

You have shown your commitment to your finances in the past by signing up for Equifax Credit Alerts for PayPal Users. Unfortunately, we will be discontinuing these free Credit Alerts on January 31, 2008. If you would like to continue to receive credit profile alerts, you can, by purchasing an Equifax credit monitoring product.

As always, we encourage you to take steps to protect yourself from identity theft.

Your Equifax Customer Care Team

That is all we know now about this development. Check back at a later date for more analysis and insight.

The article that follows is now part of credit monitoring history!


About PayPal's Free Credit Monitoring (Discontinued as of December, 2007)

PayPal has partnered with Equifax to offer its customers a free, extremely minimal credit monitoring service.

Minimal may be an understatement, it monitors exactly two types of activity: Changes to account balances and new credit inquiries. You are not alerted of more important activities like new accounts opened in your name, changes of address and new public records.

Also something to consider: a consumer news site warns that the customer agreement allows for the free service to become a paid subscription without notice (though there is nothing indicating such a plan is afoot).

The service is better than nothing and the price is right (free). The Knowzy take: PayPal's credit monitoring is not a rip off but also not particularly useful.


The Offer

This is a bare-bones credit monitoring service to be sure. In fact, they are calling it "Credit Alertâ„¢ for PayPal Users" because the only credit monitoring feature is the alerts (and a tiny subset of the typical alerts, at that).

The service alerts you of two types changes to your Equifax credit report. You can be alerted both by e-mail and as a text message to your cell phone. The two alerts offered by the PayPal service are:

  • Credit Inquiry Alerts

    A credit inquiry occurs when a company requests information from your credit report. Inquiries come from three sources: Companies that have issued you credit, companies that would like to issue you credit and companies from whom you are applying for a line of credit. Of the three, it is the last that is useful if you are concerned about identity theft.

    If you were to receive an inquiry alert saying that you were applying for a new line of credit and you don't remember making such a request, this could spell trouble.Call that company immediately and find out more.

    It's important to note that this alert doesn't mean a new account wasopened, just that someone applied for a new account.


  • Credit Account Activity Alerts

    With PayPal Credit Alerts, you can monitor your credit accounts in three ways. You can be alerted when an account balance increases by a specific dollar amount or by a specified percentage. You can also be alerted if there is no activity on an account for a specified number of months.

    The balance increase alerts will tell you, for example, if your credit card balance increases more than $200 in a month ($200 is the default).

    Presumably, balance increase alerts would also indirectly and belatedly alert you of a new line of credit that is actively being used. Assuming the new credit account is reported to Equifax, it would show up on your credit report. After a month passes, if that account balance has increased over your threshold, you would be alerted.



What the Offer Doesn't Include

Traditional credit monitoring services offer more than a half a dozen different types of alerts; PayPal's only offers two. It does not allow you to check your credit report or score. It only monitors one agency's credit report- Equifax. It offers no ID theft insurance.

Comparing it alongside other credit monitoring services, PayPal's Credit Alert service doesn't stack up well at all, with one important exception: It's free. Despite its shortcomings, as long as it is a free service, it doesn't hurt to sign up.

Here is what you'll be missing as a PayPal Credit Alert enrollee:

  • Most of the Typical Credit Alerts

    You will not be getting a full picture of changes to your credit report with this service. You will not hear about accounts that go to collection. You wont be alerted of new accounts. You will not hear about lawsuits and tax liens.

    Here is the full list of credit report changes are not included, according to PayPal's web site:

    • Name change
    • New/change of address
    • New account
    • Changes to existing accounts
    • Judgments
    • Tax lien
    • Bankruptcy
    • Collections
    • Credit history
    • Public records

    Even though you don't get many of the "big picture" alerts, PayPal's two alerts are still a good supplement for the periods between your free credit reports.


  • Multiple Credit Bureaus

    The information on each of your three credit reports is often not identical. An account may be reported on your Experian report but not on your Equifax report, for example.

    When you pay for a credit monitoringservice, you have the choice to monitor all three of credit reports. PayPal's Credit Alert only monitors your Equifax credit report.


  • Access to Credit Report or Score

    Typically, credit monitoring services give you access to your credit reports and credit scores. This is not included in PayPal Credit Alerts.

    You never see your credit report, not even when you first sign up. You only see changes to your report.


  • ID Theft Insurance

    Most credit monitoring services are now bundling an insurance policy to cover your expenses if you become a victim of identity theft. This insurance is not included in PayPal Credit Alerts. Then again, identity theft insurance is probably something you don't need anyway.


Who Qualifies for PayPal's Free Credit Monitoring?

Any US citizen with a PayPal account qualifies for the free credit monitoring. PayPal accounts are free and require only an e-mail address and either a checking account or credit card.


Potential to Charge Automatically Charge Later?

Consumer information site warns that the terms of use (which you agree to before signing up) allows Equifax to turn the free service into a paid subscription. Nowhere on PayPal's or Equifax's site does it suggest they are planning to charge for the credit monitoring. On the other hand, given the credit bureaus' collective track record of deceptive practices, such a move wouldn't be terribly surprising.

Considering that this service is of little value, the risk of being charged for it is something to consider before signing up. With the offer being tied to your PayPal account, it would be awfully convenient for Equifax to automatically charge you.

We at Knowzy have a PayPal Credit Alert account set up, so you will certainly hear it on this page if they ever suddenly start charging.


Originally Published:  Saturday, August 19, 2006, 5:00 PM PT

Last Updated:  Friday, July 15, 2011, 5:25 PM PT

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