Credit monitoring is a specialized service that notifies you when your credit report is modified. This notification helps you in validating the accuracy of the modification. This added layer of account protection is necessary to prevent identity theft and prevent all problems associated with it. Any suspicious activity on your credit report should not be ignored as it can indicate a fraud. In fact, errors in credit reports are often the reason for lender rejections that can be completely eliminated by monitoring your credit reports.
Thanks to the growing identity theft that has gripped America, the credit monitoring services have now become increasingly sophisticated to prevent activities that can jeopardize the sanctity of your sensitive information.
In this article, we will discuss credit monitoring and how it works.
The Role of Credit Monitoring Services
While the full list of services may vary from provider to provider, the credit monitoring service providers usually alert you of a modification made to your credit report within 24-hours. In most cases, the companies notify via email, text messages, or a phone call. Here are some of the activities that the credit monitoring service will notify you about:
- Credit reports will notify you when a new credit card or a loan is opened in your name
- A loan application or a credit card application submitted in your name is alerted by the monitoring services as hard inquiries.
- Any changes to your existing accounts will be flagged.
- Address change linked to your credit card or loan, if changed, is alerted to the account holder.
- Information about bankruptcy, tax liens, and civil court judgments are posted on your credit report
- Non-credit related red flags such as payday loan requests are also flagged
Needless to say, if these activities were not authorized by you, they could be a sign of fraud. Therefore, it is important to avail credit monitoring services to know what is happening on your credit report and to prevent any fraudulent activities.
The main objective of a Credit Monitoring service is to give you pertinent information about your credit report in a timely manner. How you put that information to use is your responsibility. Just remember that credit monitoring is an essential step but not a fool-proof precautionary measure against identity theft. In an ideal situation, it must be used along with other tools to provide maximum protection.
Here are some tips to make credit monitoring most effective:
- Avoid the traps of free trials: Most credit monitoring services will lure you into signing up for their free trial services and hope that you forget to cancel so that they can automatically bill you for a monthly subscription. However, such offers are not that easily cancelled. In most cases, you would give up trying to cancel out of frustration. This is the reason it is important to not fall victim to such traps.
- Customize Your Notifications: The best way to maximize your credit monitoring service is by tailoring it to suit your lifestyle. For instance, if you are someone who checks their emails more than their text messages, then it is advisable to be notified by emails. The goal is to make the communication process seamless for your credit monitoring service to be truly effective.
- Do Not Procrastinate: Failure to take action against suspicious activities defeats the whole purpose of using credit monitoring services. Hence, it is advisable to act on all your important notifications in a timely manner.
- Closely Monitor your Credit: You are entitled to get a free copy of your credit report once in every 12 months. This gives you an opportunity to monitor your own credit on a regular basis. You can order one of the three reports after every four months to check for suspicious activities. At the same time, you should also check your credit card statements every month to look for transactions that appear unfamiliar.
- Lock your Credit Report: All the three major credit bureaus, Experian, TransUnion, and Equifax, offer lockable credit reports to prevent unauthorized access.
Credit monitoring services are worth the money in most situations. This is especially true for victims of identity theft who have been subjected to fraud. By using these services, you can prevent the fraudsters from using your credit information to open new accounts or reroute the existing ones to another address. Depending on your requirement, you can either choose the paid service or use one of the many free tools to monitor your credit reports.