You must have heard that it’s vital to know what’s in your credit history, especially prior to obtaining a loan. The straightforward way to do this is to pull your free credit report once a year. That way, you can inspect for errors or, even worse, fraudulent activity.
Now the question arises, is that all you should do?
Various companies along with the major “players” in the credit monitoring industry offer credit-monitoring services to aid consumers to keep an eye on changes in their credit reports that might affect their credit scores. Commonly, the companies’ alert consumers by text, email, or, through their mobile phone app. Some services even provide peeks at your changing credit score.
“We see people signing up for our credit monitoring products for multiple reasons” says Jason Walowitz, president at UFC. “Whether it’s to see their scores before making a large purchase like a house or a car, check their reports for errors or monitor for identity theft.”
To protect your identity
“Generally, one of the biggest selling points for credit-monitoring services is a fraud indicator, especially for those who have already been victimized before by identity theft. These services offer almost real-time alerts when a major change has occurred, such as balance changes, newly opened accounts or new activity on old accounts.” says, Jason Walowitz.
By the time you get an alert, the fraud has already occurred. A cheaper and better way to protect yourself is a credit or security freeze.
This method keeps new creditors from pulling your credit report and reporting information about you to the credit bureaus. Only creditors that have an existing relationship with you can get your credit report and report to the bureaus.
That means if a corrupt individual wants to open a new credit card account under your name to fund a shopping spree, it won’t be possible because the credit card issuer won’t be able to pull your credit report as part of the application process. Therefore, the fraud is stopped before it can even happen.