Credit Monitoring

Credit Monitoring Helps Detect Identity Theft

Credit monitoring, according to the Federal Trade Commission, is one of the most effective ways to detect suspicious activity on your bank, credit card and other financial accounts. The federal agency recommends checking your bank statements and financial accounts every month, and examining your credit report on a quarterly basis. You can perform credit monitoring yourself, or use a credit monitoring service.

What Is Credit Monitoring

Credit monitoring is a means of identity protection. It is the process of reviewing a credit report for various activity that may be suspicious. A credit report outlines a person’s financial history over the years. It contains information about your financial accounts and your bill and loan payment history. Credit monitoring looks at new inquiries on a credit report, new addresses, new accounts opened in your name, new employers, bankruptcies and other public records, late payments, and a change in your credit score.

The Benefit of Credit Monitoring

Credit monitoring provides real-time status of your credit reports. It determines whether activity to your credit report is correct, a system mistake, or a result of identity theft or fraud. As the Federal Trade Commission advises, awareness is an important means of preventing identity theft. The benefit of credit monitoring is staying informed. A regular review of your financial accounts reveals any suspicious activity that could be signs of identity theft. The earlier identity fraud is detected, the easier it is to recover from it.

How To Perform Credit Monitoring

Consumers can perform credit monitoring on their own by directly accessing the three nationwide consumer credit reporting agencies. They are: TransUnion, Experian and Equifax. The federal Fair Credit Reporting Act entitles consumers to one free credit report every 12 months from each of the credit reporting companies (you can order them here). Since there are three consumer credit reporting agencies, you can request your credit report from a different agency every four months. Alternatively, you can enroll in a credit monitoring service. For a monthly fee, the credit monitoring service monitors your credit file daily and alerts you of any changes so immediate action can be taken.

Note: Credit scores do not come with free credit reports.

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