What is Credit Monitoring?
Credit monitoring is the process of periodically reviewing your credit reports for accuracy and changes that could be indicative of fraudulent activity. Credit monitoring can be done either manually or by using a passive credit monitoring service, such as SmartCredit. The purpose in either case is to identify credit report errors and as protection from identity theft.
In this day and age, with the technology available, consumers can't avoid monitoring their credit and identity - it's just too easy for criminals to take advantage of you. Having a service that monitors your credit and identity activity "24/7" by checking thousands of databases for misuse of your personal information can give you the peace of mind you desire. Smart Credit will monitor the databases, and tell you if there's any key changes to your credit report, new application for credit, misuse of your identity, as well as filling you in on any creditors that have responded to actions you've taken using Smart Credit's action buttons. This gives you the ease of use and control over your credit and its monitoring you need. Click here to learn more.
Credit monitoring services generally look for any suspect changes to your credit reports including name changes, new addresses, new account information, new inquiries and new delinquencies. If the credit monitoring system identifies any of these items the consumer receives an alert. The alerts are generally in the form of a text message or an email. Once you've been alerted to potentially fraudulent activity you can take steps to correct any credit report mistakes and close down fraudulent accounts.
Self-monitoring is the process whereby you monitor your credit reports on your own, without the help of an automated credit monitoring service. The Fair Credit Reporting Act (FCRA), entitles your to receive a free copy of your credit report every 12 months from each of the three national credit reporting agencies; Equifax, Experian and TransUnion. You can claim them at www.annualcreditreport.com, which is the official website mandated by the Federal Government.
Consumers who choose to self-monitor normally stagger their free credit reports throughout the year. For example, you can claim one in January from Experian, one in May from TransUnion and one in September from Equifax. And while this certainly isn't perfect, it is free.
Some state laws provide for additional free credit reports from each credit-reporting agency. If you live in a state where you're entitled to additional free credit reports the self monitoring process is more effective. You can order a credit report from a credit-reporting agency every two months rather than every four months. Keep in mind this is not an automated process, so you have to remember to order your reports in order for this strategy to be most effective.
If you want to receive an automatic notification of changes to your credit report, you can sign up for a subscription based credit monitoring service. Many companies offer these services for a monthly fee, usually as an annual subscription. Automated credit monitoring does the work for you and lets you know when something suspicious has happened to your credit report so you can take immediate action.
The reason you want to know of potential fraud immediately is so you can take care of it now, not months later. Consumers who monitored their credit reports identified approximately 43% of identity fraud cases. Consumers who used electronic monitoring methods had lower than average out-of-pocket costs of $851 as compared to $1,378.