When it comes to managing your finances, especially your credit profile, it becomes very important to always be informed. Managing credit cards might seem to be a very easy task, but it might be challenging sometimes as you need to keep a lot of things in mind. If you are trying to build a good credit history in order to get approved for some bigger loans in the future, you might be very much concerned about your credit profile. To maintain a good credit score, it is advisable to check your credit reports on a regular basis so that you can understand where you are lacking.
But, what about fraudulent transactions or identity theft? You might not even be aware of a credit account that has been opened in your name and you will get to know about it only when you download and check your credit report. However, this is a rare can, but it may happen to anyone. The best thing you can do to avoid such situations is to get enrolled in a credit monitoring service. If you have no idea about what credit monitoring services are, let us understand them in detail below:
What is Credit Monitoring?
Credit Monitoring is a service provided by several financial services companies under which you get informed about every unusual transaction that takes place in your credit accounts. Even after all the security measures taken by banks and card issuers, the cases of credit card fraud and identity theft seem to be increasing every year. To reduce the risks, credit monitoring companies help you be informed as soon as there is some suspecting activity on your credit accounts. The following are some of the most significant services provided by credit monitoring companies:
- Hard Inquiries on Your Credit Profile: If you have enrolled for any credit monitoring service, you will be informed about every hard inquiry that takes plan on your credit profile. It is done to make sure that no one else is applying for credit cards in your name.
- Balance and Payments: You may also be notified about the outstanding balances on your credit accounts or about the bill payments that you make. It helps you track your expenses as well.
- New Credit Accounts: As soon as any new credit accounts are opened in your name, you get informed about them by your credit monitoring company. If you have not opened any such account, you can get it closed at the earliest.
- Changes in name or address: There are chances that fraudsters somehow got all your personal and financial details and they want to change your address to their address. To avoid this, you are also informed about the changes in your name or address.
- Other information: Other than the above-mentioned information, credit monitoring reports may include other details as well, such as bankruptcies, your personal information on websites, etc.
How Credit Monitoring Helps You?
Credit Monitoring doesn’t only have a single advantage, but it can help you in several positive ways. From being informed to keeping your credit accounts safe, Credit Monitoring has some great advantages as mentioned below:
Be Informed about Identify Theft and Fraud
Identity theft is one of the most serious problems that thousands of people are facing nowadays. It may have a very bad impact on your credit score as well as your financial health. People sometimes get trapped in a debt they are not even responsible for. Fraudsters may open credit accounts in your name and keep spending on them, but you get to know about it when it’s too late. With credit monitoring, you get informed about every new account that is opened in your name and you can get it closed if you have no idea about it. Though credit monitoring can’t prevent fraud directly, it helps you understand that you need to take some necessary actions.
Track Your Credit Score
Credit monitoring is not only to understand fraudulent transactions or identity theft, but it also informs you about the changes in your credit score. Every time your credit score changes even by a few points, your credit monitoring company notifies you about it. You can then understand what factors are responsible for this change and work accordingly to maintain your score better.
Monitor Hard Inquiries and Other Activities
Hard Inquiries on your credit profile impact your credit score and that is why it becomes an important thing to be informed of. Credit monitoring companies also notify you about every hard inquiry on your credit profile, so that you can get it disputed if you have not applied for any such credit. Moreover, you get informed about any small or major changes in your credit accounts, such as your name and address.
Credit monitoring can help you a lot in preventing fraud on your credit accounts. If you have experienced some fraud or suspected activity on your credit profile in the past, you must take some serious action against it. And credit monitoring can be one of the best options. Credit card fraud is not something to be taken lightly, but it can impact your financial health badly. By getting enrolled in some credit monitoring services, you can keep yourself informed and that is something really important to do. If you have any further doubts related to credit monitoring, you can freely ask us in the comment section below!