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What is credit monitoring and how does it work?


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Credit monitoring is a service that monitors your credit reports and alerts you when there are changes. For example, your credit monitoring service will notify you if a new credit is opened in your name or if a thorough consultation occurs.

According to the Identity fraud study 2019, there were 14.4 million victims of identity theft in 2018. Studies show that the greatest financial impact of identity theft occurs when a new account is not detected for six months or more. Credit monitoring helps you keep track of your reports to detect fraudulent activity and errors as soon as they occur.

Is credit monitoring worth it? Consider this: your credit score greatly affects whether you can get approval for a loan, mortgage or credit card. Credit monitoring is an easy and convenient way to ensure that your credit report is accurate and that your credit score is kept as high as possible.

What does credit monitoring do?

Credit monitoring controls your credit reports and alerts you to any suspicious changes or activity. A credit monitoring service can monitor:

  • Difficult queries: When you apply for a loan or a credit card, an exhaustive consultation occurs in your report. Whether you or an imposter submits your application, you are notified that a credit check is running.
  • New accounts: This applies to any type of credit account opened in your name, including loans, mortgages and credit cards.
  • Changes to existing accounts: If you receive a credit limit increase or your payment history is updated, it will appear on your credit report as a change.
  • New public records as bankruptcies: If a civil court ruling or bankruptcy occurs in your name, you will receive an alert.
  • Address Changes: When your address changes on any account or credit card, it appears on your credit report. A thief can try to change his address without your knowledge.
  • Credit score changes: As your credit score fluctuates, your credit monitoring service lets you know when your score goes up or down.
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Who provides credit monitoring?

There are several types of companies that offer credit monitoring services, although costs and services vary from one company to another.

  • Banks: From local banks to national brands, a bank can offer you to monitor your credit score and credit reports.
  • Credit cooperatives: Credit unions can provide a free credit monitoring service with your account or charge a fee.
  • Personal finance applications: Many budget applications and personal finance websites offer credit monitoring services.
  • Credit repair companies: A company that works to repair your credit can also monitor your credit.
  • Credit Offices: The three main credit bureaus (Experian®Equifax® and TransUnion®) offer credit monitoring packages.
  • Security companies: Companies specializing in security can also include identity protection and credit monitoring.

Depending on the company, notifications will arrive in different ways and at different intervals. Some send you a push notification within 24 hours of a query or change in your report. When considering different services, be sure to see how and when you will be notified of any changes. The sooner you find out about an incident in your account, the faster you can take action and avoid damage to your credit and finance report.

How can I choose the best credit monitoring service?

Check back with your financial institutions to see if they offer credit monitoring. You may already have credit monitoring services available.

In many cases, banks and credit unions offer the service for free if you are a member, but sometimes you will have to pay a fee. As we said before, companies offer different services and levels of monitoring at different prices. Compare what each service offers to see what is best for you.

These are the main points to consider when choosing a credit monitoring service:

  • Services provided: Some companies offer basic monitoring of their credit reports, while others offer social security number monitoring, identity theft protection and lost wallet protection.
  • Your needs: Determine the level of protection you want and need. If you have been a victim of identity theft, you may want a higher level of service. If you have not had any problems and are aware of being aware of your credit report, you may not want to pay additional services.
  • Time saved: Having a service that takes care of your credit can give you time to do other things. Maintaining tabs on your credit report requires effort and can cost money (beyond free credit reports you get every year)
  • Cost: There are several price ranges for each service and company. Compare the costs to see what fits your budget.

Do I need to use these services to keep me safe?

You're not necessary Use a service to monitor your credit. You can access and do everything a credit monitoring service can do. That said, a credit monitoring service can save you time and money, and help you alert you to fraudulent activities much faster.

Credit monitoring informs you about suspicious activities, but does not stop the occurrence of incidents.

Immediate credit monitoring alerts can help you act quickly and avoid financial damage. For example, if you are notified that someone requested a credit in your name, you can dispute it immediately.

Even if you use credit monitoring services, You should not rely solely on services to keep your information secure. Credit monitoring cannot prevent incidents, such as someone requesting a loan in your name. The imposters can open credit cards or rent an apartment when they have access to your personal information.

To avoid identity theft, be sure when you share personal information, such as your social security number. You also want to check your credit reports periodically to make sure there is no suspicious activity or errors.

How can I take advantage of all credit monitoring offers?

Credit monitoring can do many good things for your credit report and financial well-being if you know how to maximize its characteristics.

Make the most of your credit monitoring service by:

  • Adapting your notification preferences
  • Understand how credit freezes work
  • Read each alert thoroughly
  • Know what to do when suspicious activity occurs
  • Learn to dispute an error in your report
  • Review your service plan annually to see if you want to make changes

What should I do when I am alerted to a suspicious activity?

Suspicious activity can be caused by many different reasons, including negligent administrative error or intentional identity theft. You will not know until you investigate the article.

Once you determine that there is an error, contact the credit bureaus and the financial institutions involved. You can even contact the police if you verify suspicious activity on your credit report.

Lexington Law offers a comprehensive credit monitoring service that focuses on tracking your credit, protecting your identity and helping you solve problems. Additional benefits of our program include identity theft insurance and a personal finance manager. If you are interested in getting more information on how our credit monitoring program can benefit you, see Lex OnTrack.

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