How to Easily Monitor Your Credit (2024)

Why You Should Monitor Your Credit

There are many reasons to stay on top of your credit. The most obvious reason is to identify if someone has illegally accessed one of your accounts or possibly even stolen your identity. You should assume that your personal information is readily available to criminals. Even the credit bureaus have been hacked.

The most likely reason your personal information has not been used already is there are so many stolen numbers available, your information just hasn’t been selected. Yet.

In addition to watching for illegal activity, you want to raise and protect your credit scores so you can realize all the benefits a high score can bring.

• Banks require a score of 760 for the lowest mortgage interest rates
• Credit scores can impact your ability to get a job
• Landlords typically check credit scores
• Utility companies use credit scores to decide if a deposit is required
• Cell phone companies use credit scores
• Many states allow credit scores to be used to adjust the cost of your home and auto insurance
• You get better rewards on credit cards with high credit scores

The Simplest Way to Monitor Your Credit

Using an online monitoring service is one of the easiest ways to stay on top of your credit.

I have used CreditKarma.com for years. CreditKarma is a free service that provides credit scores from TransUnion and Experian, two of the three monitoring bureaus. But, as the saying goes, “If you aren’t paying for the product, you are the product.” This statement is true in the case of CreditKarma. Their business model is to present you with credit card offers, auto loans, mortgages, and personal loans. A couple of years ago, they even started offering free income tax filing. I understand the trade-offs of using their service and I’m willing to accept them. They don’t spam me with email offers. The advertisem*nts only appear when I log in to their site and check my score.

For me, the benefits outweigh the negatives. Whenever I make a change to an account, CreditKarma sends me an email. If I apply for a car loan, a credit card, or an equity line, I get an email from them. If my scores change because of the age of an account or the balance of my accounts, I get an email from them. These automatic notifications give me peace of mind.

Paid Monitoring Services

Pricey online monitoring services charge a substantial fee for the same service. There are many available: LifeLock, Identity Guard, IdentityForce, CompleteID, and the list goes on. Not surprisingly, the monitoring bureaus own many of these services. Typically, the costs are in the $20 to $25 per month range. I bristle at the idea of paying for a service the credit bureaus could provide for free if they chose to.

If your personal information is compromised, most of the online monitoring services offer some level of identity theft insurance and credit restoration assistance. However, I prefer to monitor my scores on my own with a few simple processes.

Easily Monitor Your Credit Yourself

Monitoring your scores on your own is a straightforward process. It involves three simple steps.

1. Check your credit card and bank statements for any suspicious activity
2. Get your free annual credit reports from the monitoring bureaus
3. Actively dispute any discrepancies

Check Your Credit Card and Bank Statements For Suspicious Activity

The first line of defense of your credit score is to pay attention to your bank and credit card statements. Every month, take a quick look at your statements and make sure there are no transactions you don’t recognize. Keep an eye out for the small purchases that you think might not matter. Typically, the thieve’s process is to test out your stolen card information with a couple of small transactions. Three dollars here or five dollars there. The thieves want to know if anybody is paying attention and if they have a good credit card number. If those transactions go well, more significant transactions will start. People who aren’t paying attention can miss these fraudulent transactions for months.

Obtain Your Free Credit Reports

You can get your credit report for free, three times a year from Annual Credit Report.com. Cycle through each monitoring bureau every four months so you are always dealing with the newest information.

Review each report for any discrepancies. These can include things like:

• Incorrect addresses, telephone numbers, or employment
• Accounts you didn’t open
• Inquiries you didn’t authorize

Actively Dispute Any Discrepancies

It only takes a few minutes to go through your credit card and bank statements. If you see suspect transactions, notify your bank or credit card immediately. Typically, you have little to no liability if you inform them as soon as you realize the loss. If you wait, or are negligent, you may have trouble getting the charges reversed.

If you find discrepancies on your credit reports, use the three monitoring bureau dispute sites listed below.

• TransUnion
• Experian
• Equifax

Conclusion

Maintaining and monitoring your credit score is a relatively simple task and the consequences of not doing so can be quite severe. I hope this article gives you the tools and incentive to take a proactive stance on your credit.

If you need help with credit monitoring or would like to talk about more comprehensive financial planning, please contact us to set up an introductory phone call.