Credit monitoring services scrutinize a consumer’s credit report at one or all three credit bureaus for a monthly fee, alerting the consumer to late payment items, identity thefts, inquiries from potential creditors and employers, and any other credit report changes. The pros and cons of this service are fiercely debated. But there is much to be said for the advantages of employing a credit monitoring service. The consumer’s credit score is a number that extends into all aspects of an individual’s financial life; guarding that number and improving it can amount to large savings over a lifetime. And with finances being a rather complicated affair for most people, negative items and mistakes can appear on credit reports that can go under the radar of the less than attentive, and credit monitoring is an astute defense against identity theft. Furthermore, a credit monitoring service can be instrumental to the consumer in reaching the highest category of creditworthiness where the best financial terms are offered.
Necessary or unnecessary service
Critics of credit monitoring usually state that it is an unnecessary service since consumers can keep track of their own credit reports. They point out that a consumer can receive a free credit report staggered over the year from each of the three credit reporting bureaus—Experian, Equifax, and TransUnion—and become aware of any mistakes or problems which develop.
Following that track leaves many loopholes in credit monitoring where all sorts of problems can arise. As credit reports are known to be error prone, negative items such as late payments and account mistakes can sabotage job prospects for employment seekers. Large charges to credit cards can lower credit scores at the most inopportune times, causing rate changes on new loan applications. Identity theft may be occurring with fraudulent new accounts opened up under the consumer’s name, when immediate notification to the consumer is the most urgent. Looking at each report only once a year leaves these gaps which can be costly to the consumer.
Credit monitoring is a superb educational tool to gaining greater insight to one’s financial affairs and as a result leads to greater abilities to manage those affairs. Monitoring one’s credit through a service will allow for immediate feedback to the consumer of results for car loans, mortgage loans, and credit card applications. The credit score numbers will fluctuate in response to additions and deletions in the report, educating consumers in ways to better manage their finances. Also, credit monitoring services offer many online resources to help the consumer expand their financial know how.
Saving money with credit monitoring
Most credit monitoring services will cost the consumer between $10 and $20 a month, adding up to $120 to $240 for the year. It might seem like a high cost, but when consumers consider the benefits of a service, it can actually save them money. The consumer is given the tools to improve his or her credit score, and the savings can be in the hundreds and thousands of dollars. With a credit score of 760 or better, the consumer will receive the best available interest rates. In the case of a mortgage over a period of 30 years, this can amount to tens of thousands of dollars. Also, car and life insurance rates are partially dependent on a consumer’s credit scores, where the impact will again be reflected in substantial savings if the credit score can be boosted into the excellent category. When all these benefits are considered over the financial lifetime of a consumer, identity theft protection reviews excellent value for a minuscule cost.
Credit monitoring and identity theft
With the rise of identity theft crimes every year and the proliferation of new ways to steal it, everyone agrees vigilance is definitely needed to protect against the illegal use of credit information. Critics of these services say credit monitoring does not stop identity theft, and they are right, since nothing can guarantee 100% protection against identity theft. What credit monitoring services offer is immediate alerts that something is amiss when new credit accounts or address changes have appeared. With this knowledge, the consumer can immediately put a fraud alert or a freeze on an account. So many ID thefts go on for weeks or even months because the consumer is unaware until he or she receives billing statements or other indications of wrongdoing long after they have occurred. ID thieves often change the victim’s address, so incriminating billing statements are redirected to another location. If the consumer becomes the victim of identity theft, most credit monitoring services provide insurance protection and legal services to help the consumer. All in all, credit monitoring is a top defense to guard the consumer’s interests against the illegal activities of criminals.