Do You Need Credit Monitoring? How About a Free One?

Your credit situation can be a big deal. Changes to your credit situation can result in problems with getting approved for a loan, or require you to pay more in interest when you are approved. Some employers look at your credit report to get an idea of whether or not you present a risk, and your auto insurance agent might decide to pull your credit score when setting your premium.

Surprises on your credit report can turn out to be quite unpleasant, and you need to take steps to check regularly to make sure that everything is still in order. You also need to check your credit report regularly in order to see whether or not new fraudulent accounts are being opened in your name. Monitoring your credit situation is not only smart when you are planning on borrowing money, but it can also help you catch identity theft.

Surveillance

Credit Monitoring Can Help

Credit monitoring can be one way to stay on top of things without having to make the effort to look up your information every few months. A credit monitoring service will keep tabs on the situation for you. Anytime a new account is opened, or your credit card balance increases, you can receive an alert. Instead of remembering to check into your situation, an email comes right to inbox. This can be very helpful in the long run.

Paid vs. Free Credit Monitoring Services

Paid Services

There are paid credit monitoring services that cost anywhere from $15 to more than $50 a month. You pay your fee, and the services periodically check your credit report for the latest information. If you receive an alert that a new account has been opened, but you know that you didn’t apply for new credit, you have immediate knowledge that your identity has been stolen and you can act accordingly.

What you get, though, depends on the package. In some cases, with the most basic of services, you are only informed when new credit appears on your record, or when a negative item is reported on your credit history. More expensive plans will monitor a more complete online consumer profile, including public records of things like liens. However, this can get pricey over time. You need to decide what you are willing to pay, and whether you are receiving enough peace of mind with these paid credit monitoring services.

Free Services

One of the best ways to monitor your credit for free is to make sure that you access your credit report with the help of AnnualCreditReport.com. This site allows you one free report from each of the major credit bureaus once a year. You can also monitor your credit situation for free using a site like Credit Karma or Credit Sesame.

If you are looking for alerts, though, that’s possible as well. For example, Credit Sesame offers free credit monitoring in addition to their other free services. Credit Sesame monitors your Experian credit report, and will send you an email if something changes. You can turn on this monitoring feature in your Credit Sesame account and then receive notifications when something happens. You will receive an alert when important changes to your credit report are found. It’s easy to turn credit monitoring on and off, and you can do it easily from your Credit Sesame account.

It is worth noting, though, that mistakes on one credit report might mean mistakes on others. So if you only get free monitoring for your Experian credit report, a problem on that document could indicate problems elsewhere, so you will at least know to check.

Peace of Mind

The main reason to get credit monitoring is for the peace of mind. You can feel a little bit more confident about your credit situation when you have monitoring. You know that identity theft will be revealed a little faster, and you can rest a little easier knowing that your credit is being watch. Of course, there is no foolproof way to avoid identity theft, and someone could steal your identity even with the safeguards in place. Plus monitoring doesn’t always catch everything. But credit monitoring can certainly reduce your stress level, and even mean that fewer identity thieves manage to cause you problems.

Photo by zigazou.



Author

By , on Dec 20, 2012
Miranda Marquit Miranda is a professional personal finance journalist. She is a contributor for several personal finance web sites. Her work has been mentioned in and linked to from, USA Today, The Huffington Post, The San Francisco Chronicle, The New York Times, The Wall Street Journal, and other publications. She also has her own personal finance blog: Planting Money Seeds.

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{3 Comments}

  1. The saying “there is no such thing as a free lunch” may apply to some of the free monitoring services.

    Be sure to read through the term and conditions before signing up. Your free services includes offers from suitable lenders.

    For those with the discipline to ignore the offers to expand their borrowing, the free offer works well.

  2. Tray:

    Credit monitoring is essential to make sure that you aware of your current credit score. you may want to try free services first, and if you are quite happy about it then you can later on upgrade to paid services.

  3. Jimmy P.:

    Another option to secure your chances against credit / identity fraud is to “freeze” your credit reports. I keep my credit reports from all three companies frozen until I need to get credit (recently for house purchase) when I can “thaw” the credit reports for 30 days at $10 each… cheap insurance if you ask me.

    Happy Holidays All.

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