How often do you check your credit? While reviewing your credit report each year is important, in some cases it may not be enough, especially if you plan to apply for a loan, or if you are vulnerable to identity theft. A credit monitoring service can keep an eye on your credit report 24/7, and may immediately alert you if there is a critical change. Here are some reasons why credit monitoring may be important to you.
Monitoring Credit Score Changes
A lot can happen with your credit score from month to month and waiting until next year may not be soon enough if you’re applying for a loan. Just a 25-point change in your credit score can affect the types of loans and interest rates you may be eligible for. If you were to miss a payment or submit a late payment on your credit card, for example, credit monitoring services can notify you as soon as the company reports it to the credit bureau. If your credit score goes up while you’re thinking about refinancing your mortgage or financing a home purchase, it may signal the perfect time to start filling out loan applications.
Know Who’s Looking Into Your Credit History
With credit monitoring, each time a company asks for a copy of your credit report, you can get a notification. When you apply for a loan or a credit card, lenders usually ask for a copy of your credit report to help determine if you are eligible – something known as a hard inquiry.
With credit monitoring, you’ll know exactly how many hard inquiries have been made and who has been making them.
Protect Against Identity Theft
In 2016 alone, 399,225 people reported identity theft to the FTC, including credit card fraud. Using a good credit monitoring system can help prevent identity theft in its early stages, before any serious damage has been done to your finances and your financial reputation. A credit monitoring service can notify you of any hard inquiries on your credit report, which can flag inquiries you haven’t authorized. If there have been too many, you may want to put a freeze on your credit report or contact the company and put a stop to it right away.
Check for Inaccuracies and Correct Them Immediately
Mistakes can happen, even on your credit report. Instead of waiting until you have applied for a loan to find out about and have a mistake corrected, with credit monitoring you’ll know what is being reported and you can contact the lender and have the mistake cleared up sooner rather than later. This could save you thousands of dollars by protecting you from increased interest rates on any number of loans you may apply for due to information that is inaccurately reported to the credit bureaus.