What is credit monitoring or these services and solutions designed to “monitor my credit history?”

A credit monitoring service basically looks over and guards your credit history file. If there are any changes to additions to your credit file, including personal information changes, new credit accounts being opened or closed, new items of public credit record, or hard credit inquiries, you will receive a notification within 24 hours. This puts you in the driver’s seat as in being in control and aware of what is in your credit report and how your credit score may be changing. As part of the credit monitoring service, most of them will provide you regular periodic online access (if not unlimited) to your credit report. This is a great way to get a free credit report and score as well as take advantage of a credit monitoring solution.

Why is credit monitoring important?

There are many benefits of signing up for a credit monitoring service. First of all, as part of the credit monitoring solution, you will usually be given access to your credit report and credit file so that you can see exactly what is in there right now as what lenders and creditors would see. This allows you to identify any errors contained within so that you can dispute and have them fixed as soon as possible so that the inaccuracies do not adversely affect your chances of getting a loan or credit.

Perhaps the most important part of the credit monitoring solutions is that you receive notifications for any changes to your credit file within 24 hours. This allows you to spot and problems or signs of fraud right away so that you can stop any identity theft in progress. In fact, this is one of the best ways to prevent identity theft, since in order for an identity criminal to profit from having your personal information, they must apply for a credit card, credit line, or loan with it which requires a hard credit check. When you are notified of the new account being opened or the hard credit check, you can stop the identity theft. Also, if any of these changes are simply mistakes, you can have them correctly right away, since catching the problem as early as possible prevents the error from affecting your credit score or hurting you financially. Disputing an inaccuracy as soon as possible also helps your chances of having it removed.

You might think that you might want to simulate having the credit monitoring service by doing it yourself, as in signing up for an unlimited credit report access service and keeping an eye on your credit report each day. This, however, is often just unneeded tedium, as the costs of a credit monitoring service will be comparable to that of a credit report and score access service. Also, it is a hassle to have to check your credit report everyday to catch any changes or errors especially when almost every day there won’t be any changes to your credit report at all; credit monitoring services are guaranteed to notify you automatically should any changes occur. Both for their monetary value and time savings potential, and the benefit of guarding your credit report, credit monitoring solutions are an invaluable and highly recommended type of service.

What would be a difference between a service that only monitors my credit file with one credit reporting agency only and one that does three-bureau credit monitoring?

If a credit monitoring service only monitors your credit file with 1 out of the 3 major credit bureaus, then you will not be notified of any changes made to your credit files with the other 2 agencies. As an example, say you sign up with a credit monitoring service that only monitors your TransUnion credit file. If a credit or lender request a copy of your Equifax credit report and score as a hard credit inquiry, you will not be notified at that step. Should the account or loan be approved and the 3 credit bureaus be notified of a new credit account, then you will be notified.

As you can see, with only monitoring of one credit bureau, you will not be able to catch instances of identity theft or fraud as early as possible. Also, in the rare but very unfortunate case that a new credit account is only reported to a credit agency that your service is not monitoring, you would miss that change altogether. Thus for these reasons, we highly highly recommend that when you sign up for a credit monitoring solutions, that you sign up with a monitoring service that watches your credit file with all three major credit reporting agencies.