Credit Monitoring

Credit monitoring is a service that checks the credit reports of individuals automatically, at periodic intervals. Once an individual signs up, the credit monitoring service provider will notify him/her of the date and nature of changes made to the credit report, almost as soon as they occur.

The most important benefit of a credit monitoring service is that it offers credit report-tracking convenience to individuals. Some other significant benefits of credit monitoring are:

·        Reducing vulnerability to identity theft: Online identity theft is rampant. If an individual falls prey to it, his/her credit score may be compromised. This is because the identity thief could use the personal and financial information of the individual to open a new account or acquire credit/loans in his/her name. A credit monitoring service provides immediate alerts if potentially fraudulent activities are recognized in the individual’s account.

·        Credit management: Besides providing frequent report alerts, credit monitoring also assists in managing different aspects of an individual’s credit. This includes keeping track of payments and due dates.

·        Maintaining credit report integrity: Credit monitoring enables one to assess changes and spot errors, by the credit bureau as well as the lenders, instantly. This helps to retain data integrity, because if the errors are spotted after a considerable time lapse, they become harder to rectify.

 

Individuals must also assess the limitations of credit monitoring before hiring a monitoring-service provider. Some constraints of credit monitoring are:

·        It isn’t foolproof:There are a large number of fraudulent acts, which do not affect the credit report and are therefore not included in the credit monitoring alerts. If an identity thief uses your Social Security number with another alias, credit monitoring will be ineffective.

·        It is expensive: Credit monitoring is pricey and is also avoided by people since they have to do most of the work themselves.

·        It is not as timely as projected: Although some credit monitoring services boast of daily monitoring, in reality, this claim is untrue. This is because creditors usually delay reporting to credit bureaus.

·        Limited monitoring: Generally, these service providers only provide a three-bureau credit report on the first request and then revert to single-bureau monitoring.

Finally, bear in mind that credit monitoring can be substituted with other less-expensive alternatives, such as identity monitoring services. Moreover, individuals can effectively monitor credit reports themselves by acquiring free credit reports from all three major bureaus.