Credit monitoring tracks all activities that occur on your credit report, alerting you of any changes. When you keep track of your account, you can monitor any illegal activities such as identity theft. As the quickest growing cybercrime in the United States, identity theft happens every 79 seconds. For this reason, credit monitoring has become so crucial.
With credit monitoring, not only will you be aware of suspicious activities and stop it immediately – you’ll also be able to fix your credit report as soon as possible. This article will help you learn how credit monitoring works, how it can benefit you, its limitations, and why it’s essential.
How Credit Monitoring Works
When applying or using credit, creditors usually report your activity to the three national credit bureaus. The reported information from these creditors usually gets collected and organized in three credit reports, one with each bureau. Reported information that shows up on credit reports includes the opening of new credit accounts, time of payments, missed payments, and file for bankruptcy.
Credit monitoring can help you stay updated on what creditors report on your credit report, including negative items such as hard inquiries, late payments, etc. All of these can affect your credit score. Staying updated can help you respond faster and work toward maintaining a decent credit score – and positive credit report.
Moreover, applying for credit monitoring can help you spot fraudulent activities like identity theft made by the creditor.
The Benefits of Credit Monitoring
With credit monitoring services, you can stay updated on various details of your report. It provides you with several short- and long-term benefits, such as:
- Helps You Know More About Identity Theft
Identity theft is quickly becoming a severe cyber issue in the United States as it’s one of the most impactful factors on an individual’s credit score. Credit monitoring can help you avoid identity theft by actively notifying you of any suspicious activities indicative of possible fraud. With this, you can take the appropriate action immediately, keeping your credit score healthy.
- Controls Your Finance Better
Even a slight boost in your credit score can significantly increase your chances of qualifying for a loan. With credit monitoring, you can become more alert in real-time, allowing you to re-think your spending habits and help you keep your finances in check.
- Monitor Credit Inquiries Made On Your Behalf
Working with credit monitoring companies enables you to customize updates, allowing you to receive updates relevant to you. For example, if you’ve been a victim of identity theft, you can choose to prioritize notifications about suspicious transactions from your credit card.
- Saves You Time
Applying for a credit monitoring program can help you avoid the extra work, allowing the company to do the leg work. With this, you can save time and spend it on things you’d instead do.
- Improves Your Financial Health
Having a favorable credit report and history can be an excellent indicator of financial health. Credit monitoring enables you to see which areas of your credit files need to be addressed immediately.
The Limitations of Credit Monitoring
Although credit monitoring can do a lot to help you improve your credit report, it’s not a one-time solution, and it can’t protect you from fraud. Just like any other service, credit monitoring has its limits, and here are the things not to expect when availing of guarantee positive credit monitoring service:
- Keep your digital information safe from data breaches
- Stop phishing emails
- Report fraud to the authorities
- Prevent people from applying for credit accounts in your name
- Notify you when a third party applies for a job using your name
- Alert you when someone uses your personal information to open utilities
- Automatically fix errors
- Set fraud alerts
- Initiate credit freezes
Why Is Credit Monitoring Important?
Credit monitoring is crucial as it doubles as an early warning system, letting you know of any illegal activities or misinformation on your credit report. Most credit monitoring services involve 24-hour tracking, but some companies offer more complex monitoring. These include sending notifications when the account holder’s credit score changes abruptly or applies to other credit products. By keeping you updated about your credit report, you can reap several benefits – making credit monitoring crucial.
With credit monitoring, you can spot fraudulent activities immediately, which is always a good thing. After all, no one wants to see months or years later that someone else has been using their identities. Identity theft can go undetected for longer than six months and can have a massive financial impact on the credit holder.
Additionally, you can stay updated regarding your creditworthiness. For example, you’ll immediately find out if your credit score increased or decreased. These can help you see what’s boosting or reducing your credit score, allowing you to do some long-term planning.
When to Pay for Credit Monitoring?
Although people have access to one free annual credit report per their credit bureau by law, it’s best to pay for credit monitoring services, especially when you’re a previous victim of identity theft. Or if you’re at high risk of attaining negative items on your credit reports, such as late payment and hard inquiries.
Even if you can check your records and monitor your credit file, this isn’t nearly as thorough as professional credit monitoring services. Paying for more comprehensive credit monitoring services enable you to take further precaution in protecting your credit report against fraud.
Credit Monitoring at The Oasis Firm
If you’re looking to have your credit monitored, we’re here to help! Here at The Oasis Firm, we strive to help our clients reach their unique financial goals long-term. In credit monitoring, we’ll watch your credit report regularly and notify you of any changes. For example, if someone tries to open a credit account in your name, you’ll be alerted immediately.
Besides credit monitoring, we can also help you develop an action plan to build your credit score over time. Whether you need to improve your credit score or want to avoid fraudulent activities in the future – The Oasis Firm is the perfect place for you!