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The Importance of Credit Monitoring
Consider this scenario:
An identity thief steals your personal information, opens a number of new lending accounts in your name and goes on a shopping spree. You have no way of knowing this activity is going on because you haven’t checked your credit report recently. One day, you apply for a new credit card and your request is declined. You discover your credit is ruined.
With credit monitoring, this scenario is stopped long before the identity thief does any damage to your credit. Credit monitoring performed through a credit monitoring service warns you of suspicious activity on your credit report immediately. And because credit monitoring services scrutinize your credit report daily, there’s no need to keep track of the last time you requested a review of your credit report.
The Federal Trade Commission further illustrates the importance of credit monitoring. Its latest statistics show that identity theft accounts for more than 42 percent of all reported frauds. Without credit monitoring, it takes victims about 12 months to notice their identity has been stolen. Credit monitoring is an important tool for detecting an identity theft crime and minimizing damage to your name and credit.
5 Reasons Why Credit Monitoring Services Are Important
1. Monitors all three consumer credit reporting companies simultaneously. Under federal law, consumers can request a free credit report every 12 months from each of the credit bureaus. You can choose to receive all three credit bureau reports at one time every 12 months, or one report from a different credit bureau every four months. Either way, an identity thief could have stolen your personal information and opened accounts without you knowing it for several months. With a credit monitoring service that monitors all three credit agencies on a 24/7 basis, you are instantly notified of any new accounts on your credit files so you can determine if they are legitimate.
2. Reduces the financial impact of identity theft. According to the Federal Trade Commission, victims who discover identity theft within five months of the crime incur no out-of-pocket costs. Credit monitoring services alert you to suspicious activity on your credit report immediately so you can stop the misuse of your personal information immediately.
3. Alerts you to new account fraud immediately. When someone uses your personal information to open up a credit card, file for a Social Security number, or attempt other unauthorized transactions, a credit monitoring service warns you about the activity much sooner than finding out on your own.
4. Helps to maintain your good credit score. Inaccuracies, fraudulent activity, or identity theft can negatively impact your credit score. With a low credit score, you are more likely to be declined for a credit card or loan or be charged higher interest rates. Credit monitoring enables you to stay on top of your credit report and correct any information that adversely affects your credit score.
5. Monitors all changes to your credit information so you can review any errors in new postings and see your current credit standing.