Over half of people don’t know their credit score and even more have never seen their credit report. While it might not seem like a big deal, these people could be giving away money without even knowing it. Your credit score is a powerful factor when it comes to your finances. Not knowing your score can cost you, not only when it comes to making major financial decisions, but also in your day-to-day finances. Here are the top three ways that not keeping tabs on your credit report can cost you:
Your interest rate on everything from a mortgage to a credit card is determined by your credit score. While not the only factor that banks and lenders consider, it is an important one. Your credit score also determines what you will pay in insurance premiums, whether it be car insurance or life insurance. Having a low credit score could mean that you are paying thousands of dollars in extra money to lenders over the years, especially if you own a home, have a car or have credit card debt.
Knowing your credit score is a good place to start, but actually monitoring your credit can help you find the best places to raise your score so you aren’t paying extra in interest and premiums. Once you have access to your credit report, look for any mistakes on it, whether it be your address or a late payment that you actually paid on time. Lenders can often make mistakes when reporting to the credit bureaus, but it’s up to you to find those mistakes. Once you find the mistakes, report them to the credit bureaus, or you can hire a credit repair service to do it for you.
Identity theft is on the rise, big time. With the advance of technology, it’s getting easier and easier for hackers to access your personal information and either use your credit cards and bank account, or set up credit cards or loans in your name. If identity thieves steal your credit card or bank information, it’s easier to catch them, since unusual charges show up on your statements. If they open credit cards or loans in your name, you may never know about them until it’s too late.
Monitoring your credit report is the best way to look for identity theft. You will notice if new accounts are being opened without your knowledge. Many credit report monitoring services also offer a wide range of identity theft protection services, including monitoring your social security number, you address, the black market and other places that identity thieves could be using your identity.
One of the most common ways that your credit score can be dragged down without you knowing is by old accounts being sent to collections. Say you switch cell phone providers and you mistakenly forgot to pay the last $21.95 that you owed on your account. You figured you were done with the account, so you never looked at another piece of mail they sent you. If you don’t pay that $21.95 within a certain amount of time, the phone carrier can send your account to collections without you knowing.
If you are monitoring your credit report carefully, you can catch these collection mistakes before they cause too much damage to your credit score. Collections appear on your credit report as soon as they happen, so you will know right away that you forgot to pay or didn’t close an account that you thought you did.
We looked at the top services and picked the three that offered the most monitoring and protection. These services not only monitor your credit, but they also provide identity theft protection:
One of the only services that allows for monthly updates on your credit score, which is nice to have if you are trying to build your credit and want to keep track of your progress. On top of monitoring your credit reports and scores, Lifelock also provides identity theft protection, which is a nice feature to have. In an effort to protect your identity, they will unsubscribe you from all junk mail lists and monitor a wide range of your information, including driver’s license number and social security number. Lifelock is currently offering 10% off any of their products.
IdentityForce is great because it offers daily credit report monitoring as well as a credit report and score tracker. It’s great for families because it offers a ChildWatch add-on to the regular credit monitoring and identity theft services that helps protect your child’s identity. The price for their regular service is $19.95 per month for both credit monitoring and identity theft, plus $2.95 for the ChildWatch service. IdentityForce’s identity theft protection monitors all of your financial information, as well as your public records, and will alert you if there is any unusual activity. IdentityForce also offers a 14-day free trial, so you can try out the service before you commit.
Credit Sesame is awesome for those who are reluctant to give up their credit card information to get credit report monitoring services. It’s 100% free, which is very unusual in the credit report monitoring world. Credit Sesame is also one of the most respected credit report monitoring services. It updates your credit score every month, so you can see how your credit score is changing. Does Credit Sesame offer everything other credit report monitoring services do? No, but if you are just looking for simple credit report monitoring, Credit Sesame is the best service for you.
Advertising Disclaimer: Simple. Thrifty. Living. does receive compensation for some of the services that we recommend, although we only recommend services that we truly believe are the best.