Credit Monitoring: What is it and why is it important?

You may have never heard of credit monitoring, but you can bet someone has been using it on your accounts for quite some time now; be it a lender or an insurance company. Credit monitoring simply means keeping an eye on your credit file to look for changes, whether positive or negative. These companies will look in order to calculate and alter your rates according to your credit risk.

So why do you need to know about credit monitoring? Because it’s something easy you can do that can help to prevent your becoming a victim of identity theft or stop the thieves as soon as they get a hold of your personal information before they can do major damage to your accounts or your good name. So how do you go about doing this? Simple. Just sign up for one of many credit monitoring services.

Probably the most well-known are the ones that are offered by the three major credit bureaus: Equifax, Experian and TransUnion. There are better ones available however such as Identity Guard and Chase Identity Protection. Once you’re registered with a service, you’ll be notified by phone or email of changes to your credit file, whether they are unauthorized or not. This way, you can either confirm, that yes, the change is legitimate, or if the change is not legitimate, can begin a dialog with the credit bureau in order to correct your information. You can also contact the organization where the identity thief altered your information and get the account canceled before the thief can run up the charges.

Even if you regularly request copies of your credit report, you should still consider credit monitoring. Think about it. You get your credit report maybe one or two times a year. You don’t want to remain in the dark for all that time in between. A credit monitoring service can scan your file on a daily basis so you know right away if any fraud has taken place. Otherwise, the thief could have months of free reign on your personal information before you even know that anything has happened.

And going back to the first point I made, credit risk. Your credit risk is going to be extremely high if an identity thief gets his or her hands on your accounts or creates new ones. That’s because thieves are not known to make on time payments, or, okay, to make payments at all after they make purchases. This could affect your ability to obtain a loan you need or even get that important job you’ve been waiting on.

Find out more about the available credit monitoring services today, before you think you need to. Then, if an identity thief dares to try to use your personal information for his or her personal gain, not only will you be ready, but you can act on it almost instantly.