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What is Credit Monitoring

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sammy kelvin
What is Credit Monitoring

 

Your credit report reflects not only your financial history but also your borrowing habits. Generally, the better those habits, the higher your credit score. But credit reports aren’t without mistakes. And they can sometimes serve as an opportunity to stop credit card fraud in its tracks.

If you don’t have the time to monitor your financial health yourself, credit-monitoring services stand ready to help — most often for a fee.

What is a credit monitoring service?

A credit monitoring service alerts you when new information appears on your credit report, such as credit inquiries, new accounts or changes to your borrowing limits.

With credit monitoring, you sign on with a company that agrees to monitor your credit reports for changes or suspicious activity. They advertise these services as a way to detect fraud or ID theft. But they can also help you keep a closer eye on your overall financial health.

Why is monitoring your credit important?

A credit-monitoring company can be a way for you to monitor what potential lenders and creditors see in your bureau reports. Most include services like:

  • Text and email alerts. You’re notified immediately after changes to your credit report, giving you a chance to spot inaccuracies and fix mistakes before your score is affected.
  • Fraud monitoring. By keeping close tabs on your report, these third parties can pinpoint strange activity that could be a result of credit card fraud.
  • Identity theft insurance. Some services offer identity theft insurance for a cushion of protection if your sensitive information gets into the wrong hands.

What credit monitoring can’t do

Though useful, credit monitoring has its limits. It can alert you to potential credit card fraud or ID theft, but it can’t:

  • Prevent fraud or a stolen identity from occurring in the first place.
  • Keep phishing calls or emails from reaching you.
  • Stop a fraudster from applying for credit in your name.
  • Take steps to correct errors in your credit reports.

Credit-monitoring services promise to keep track of changes to your credit report. But while they can alert you to potential inaccuracies in your report, they can’t prevent them from happening.

 

 

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