What Is Credit Monitoring?

Written By Melanie Green
Last updated September 15, 2021

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September 15, 2021

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What is credit monitoring? It is the regular monitoring of your credit record to detect any fraudulent activity or changes without your knowledge. It is an important step to ensure that no one makes unauthorized accounts under your name.

Credit monitoring requires reviewing information from the three credit reporting agencies: EquifaxExperian, and TransUnion. The information from these agencies is what financial institutions use to determine whether to open new accounts in your name or whether to close them. If you are a victim of identity theft, monitoring your accounts allows you to see what is reported. This could be helpful because fraudulent activities often have a negative impact on your credit report.

Credit monitoring service providers perform an analysis of a person’s credit reports and notify them of any irregularities they have detected. They also inform the individual of their rights and lets them dispute items on their credit reports. In most cases, credit monitoring is performed by the credit bureaus and not by consumers themselves.

There are a number of different types of credit monitoring services available. These include:

Identity Theft Protection

One such service is identity theft protection. This service allows you to check your credit report for any unauthorized transactions that were made in your name. You can then notify the lender or company responsible for the transaction to stop these transactions immediately. This could prevent a foreclosure from taking place.

Credit Monitoring Services Through Banks or Agencies

Another type of credit monitoring works just by email. You will sign up for a free credit monitoring service that sends you a weekly update on your credit file. You will then have the opportunity to review the report to find out what is being reported. If you see something that you believe is not accurate, you can dispute it with the credit reporting agency. By checking your report monthly, you will be able to catch identity theft at its earliest stages. Some banks offer monthly or weekly reports through your banking portal for certain credit cards.

Debt Management Agency

A third type of monitoring is credit reporting and repair through a debt management agency. A debt management service works with you to get your bills under control. In many cases, this means negotiations with the creditors. Once the debt management company negotiates the payment terms, the bureau will provides a final report. The service provider will also offer advice on how to improve your credit report and score.

Request Free Credit Reports Annual From the 3 Major Agencies

Fraudulent activity can occur on credit reports, even when you are not aware of it. You should check for suspicious or false activity periodically. Either go to the website of the credit reporting agency or contact the fraud department. You are entitled to a free credit report each year through each agency.

All of these types of monitoring are very useful and beneficial. You can choose which ones you want to use and which ones you prefer not to use. You may not always be able to keep an eye on all activity on your accounts in real time, but monitoring is still very good. Monitoring can help you take action if you notice anything out of place. Credit monitoring services are very helpful if you are trying to keep a good credit score before making a major purchase.

A good credit monitoring service can tell you about any new activity using your name. This includes:

  • opening and closing new accounts
  • changing your address
  • closing old credit cards or loans
  • and even applying for more credit cards or loans on existing accounts

These activities are able to affect a person’s credit score, which is a major determinant of whether the person will be given credit or not.

Identity theft is a huge problem. Many people become victims of identity theft because they fail to take action on notifications that their accounts have been accessed. These notifications usually come through email and will contain charges against the victim’s name. In this case, you will need to take action by informing the credit monitoring services about the incident, and you will be able to prevent further charges. If you receive the notice but do not act on it, it won’t help your credit.

There are two basic credit monitoring services – free and paid services. Free services are generally offered by individual banks and credit reporting agencies for a limited period of time. A limited-time service is an effective way to monitor credit reports in emergencies.

Paid Services

A paid service is a service offered by the banks, credit bureaus, and other lending companies that monitor your credit reports. Monitoring services usually have a specified period of time. A good paid service will let you check your credit score as often as every thirty days. This allows you to check on your credit score and compare it with what you know. By getting your credit score, you will know what areas you need to focus on to improve your score.

Most paid credit monitoring services offer a full range of services. These often include:

  • receiving fraud alerts
  • credit repair alerts
  • updates on your credit report
  • credit monitoring
  • credit repairs

Credit monitoring services can stop new applications for credit cards or loans. This is called freezing your credit. Whenever you apply for credit, the bank or other lender pulls your credit report. When they do this, they will include information such as:

  • your current balance
  • the length of your loan
  • the number of payments you have made against your loan
  • any inquiries that have been made to your account
  • whether you have filed bankruptcy within the past year

Hard Inquiries

These hard inquiries will have a negative impact on your credit report. When banks pull your report, they pull information on all of the people who have applied for credit with you. This means that a bank cannot just choose anyone to give credit to when you apply for credit.

If you are not sure which credit bureau to report to, you can always request a free annual credit report. Some companies will allow you to view their database of customer information. However, since each company has its own policies, these results may be different. To keep track of your credit history, request a free annual credit report from each bureau to compare them.

About the Author

Melanie Green

I'm a professional freelance writer living in Tampa, FL. I've been freelancing full-time since 2012, maintaining key relationships with my clients through always aiming to exceed their expectations. I have an MFA in Creative Writing with a concentration in screenplay writing from National University, as well as a Bachelor of Arts in Writing. I love writing about a wide range of topics including movies, technology, food and business marketing.

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