What Are Credit Monitoring Services & How Do They Work?
Many people make use of the credit monitoring services in order to be alerted to possible credit fraud and ultimately, reduce its negative effects on their finances. To ensure this level of protection, individuals to sign up for a service that will keep tabs on one or several of your major credit reports and notify you when there is a new account that is opened in your name, someone makes an inquiry to your file as well as when other possibly suspicious activities crop up. Most of the credit monitoring packages will also give you access to at least one of your credit scores and reports. For this reason, consumers usually make use of credit monitoring to keep track of their credit building progress.
Various companies are offering credit monitoring services which include the three primary credit bureaus as well as many of the major banks. It is not a big surprise that there is a big market for this kind of product since identity theft is becoming one of the most common complaints from consumers for many years.
Even though credit monitoring will not really prevent identity theft as well as other related loan or credit card loans, it still has the potential of alerting you regarding unauthorized access to your personal information before you start noticing a problem.
How It Works
Although logistics are basically provider specific, the credit monitoring services typically track your credit file and send your alerts when there are changes. Many of the companies are offering these notifications through a phone call, email, or text message, which depends on your preferences.
The forms of activities that credit monitoring services are going to bring to your attention include the following:
- New Accounts
Credit reports note each time a new loan or credit card has been opened under your name. When there is a new account that appears on your file because of the mistake of the creditor or as the result of a fraudulent activity, it is better to know about it right away instead of waiting until you receive a bill through mail.
- Hard Inquiries
Every time you apply for a loan or credit card, the respective financial institution is going to pull your main credit reports, which are referred to as a hard inquiry to your credit history. Any unexpected hard inquiry, like the ones that are not triggered by your application submission, is a sure sign of fraud. The identity thieves are well known for the use of the basic consumer data include the name, address and the Social Security number for opening financial accounts under the names of other people for them to rack up the costly charges and leave it up to the user to clean up the mess they did.
- Changes to the Existing Accounts
You will also receive an alert when your credit report indicates a significant change in your payment and spending habits.
- Changes in Address
A criminal who has the basic biographical information and access to one of your debit or credit cards can officially make changes to the address that you have on your file with the postal service so that they will receive your mail and have better control on your life. Most of the credit monitoring services are going to alert you about this kind of changes so that can easily straighten out the matter before things can get further complicated.
- New Public Records
The information regarding bankruptcies, civil court judgments and tax liens is included on the consumer credit reports and while everyone will hope to spot an identity theft before it can even get this far, the credit monitoring service is going to alert you once someone encounters these forms of difficulties while still impersonating you.
The credit monitoring service is also going to notify you regarding these changes in a matter of 24 hours after they have noted your credit report, which will then fulfill its role as your official identity theft watchdog. As soon as you discover about the possible identity theft, it will be so much better so that you can also initiate the right damage control procedures before the fraud will wreak too much havoc on your financial files.
For the past few years, the companies have also come up with identity theft solutions which as far more comprehensive as compared to what you can get from the traditional services on credit monitoring. For instance, they might also monitor any sex offender registry, activities on your bank account, applications for payday loans, and more. The advent of this kind of services only underscore that there is indeed a growing concern among the consumers when it comes to identity theft in today’s personal financial environment that is becoming more electronic than ever.
The capacity of tracking the progress in credit improvement is also the other primary benefit that you can get out of the use of a credit monitoring service. These services will also provide you with better access to all your credit reports as opposed to just receiving one copy each year and possibly, you might also receive your credit scores at the same time. Most of the monitoring companies usually offer deals with certain credit score providers even though the scores that they will provide are not guaranteed to be the ones that are being used most often by the lenders. This will not just give you the chance of routinely parsing your files for any error for at the same time, this will also allow you to stay updated with your credit standing which will then improve how you are shopping for financial products and determine if the credit building efforts are needed.
As of this moment, some of the major players in the world of credit monitoring include TransUnion, Equifax, Experian, FICO which is a credit scoring company, most of the largest banks of the nation as well as niche businesses including Identity Guard, LifeLock and TrustedID.
Credit monitoring services are no doubt important to keep track of your finances so choose the one that will best suit you.