Credit Monitoring

The Best Ways to Monitor Your Credit

Identity scams number in the thousands, and criminal elements seek new ways to steal personal information with increasing sophistication. Victims of identity fraud must often spend months trying to correct the damages these crimes cause. In many cases, consumers face liability issues that could cost them thousands of dollars. The key to reducing the risks of identity theft involves closely monitoring credit reports and bank accounts to detect fraudulent activity quickly to limit losses and address negative changes in credit scores immediately.

How to Monitor Credit

Three major credit-reporting bureaus compile information on all credit applicants that they furnish to banks, credit cards companies, and other lenders to help them make decisions about whether to extend credit. Consumers have the right to one free report each year to discover what their ratings might be, and they have the opportunity to report any errors in their records. Consumers can also take other steps to monitor their credit and detect identify fraud or credit inaccuracies.

  • Consumers can keep track of changes in their credit scores by accessing free sites online.
  • Local banks offer credit-monitoring services. Some institutions even offer these services without charge to encourage customer loyalty.
  • Consumers can elect to freeze their credit files. Locking information prevents any of the bureaus from reporting information. Without information, however, no further credit will be granted.
  • Fraud alerts require bureaus to double check with consumers regarding any credit inquiries for their accounts.
  • Consumers can also elect to outsource their credit monitoring to an agency for a small monthly fee.
  • Worried people should check their credit card and bank statements carefully to find any errors.

Do-It-Yourself Monitoring

Consumers can obtain a free credit report once each year. Additional reports cost $10 to $30, and people can request one if they suspect any fraudulent activity. This method offers no email alerts about suspicious activity, and if people check their reports too frequently, then it could cost more than a regular monitoring service.

Credit Freezes and Fraud Alerts

Credit freezes prevent criminals from getting any credit, but they also block consumers from getting legitimate loans as well. Freezes do not stop thieves from making charges on accounts or credit cards that they have already obtained illegally. However, credit freezes could prove useful. Identity-theft victims usually qualify for this service without any cost. Freezes for consumers who have not yet been targeted by crooks cost around $10.

Alerts cost nothing, and they let lenders know that thieves might be using a name without authorization. Legitimate loans can still be approved, and consumers can remove the alert status at any time. After someone places an alert on an account, the three credit bureaus will send them a free copy of his or her credit report. Disadvantages of alerts include the fact that fraud alerts are strictly voluntary, and the bureaus have no legal requirement to comply. Alerts just last for 90 days, and a request must be made at each of the reporting bureaus. After 90 days, consumers must request renewals or ask for extended alerts, which last seven years. Consumers also must present some evidence that fraud has occurred.

Bank Credit Monitoring

Bank monitoring services usually charge the same rates as the reporting agencies. Consumers can obtain unlimited credit reports and email alerts, and the bank handles all the details. Customers receive quick notifications of any problems, but banks do not have the authority to prevent other lenders from granting credit to fraudulent applicants. Monthly billing continues until customers cancel the service. Only bank customers qualify, and some banks do not offer the service.

Credit Monitoring Agencies

Monitoring agencies provide a high degree of professionalism with daily or weekly email alerts about any changes in credit reports. Fraudulent credit activity results in swift customer notifications. The bureaus also offer tips and advice to their clients that can prove invaluable. Customers get varying degrees of access to credit reports, depending on the types of plan selected. Alerts and notifications place the responsibilities for corrective actions on the customers, however. Bureaus might still grant credit to phony applicants unless fraud victims take corrective measures. Yearly service costs $50 to $200, but identify fraud could costs thousands of dollars. Optional insurance service provides protection against financial losses from identity theft. The rise in credit-monitoring services seems to have a positive effect.

Limit Risk by Monitoring Credit

The risks of identity theft grow daily. Consumers must monitor their credit carefully to avoid inaccuracies, fraud, and financial losses. Monitoring services cannot guarantee the prevention of fraud, but they do limit the negative consequences.