A beginner’s guide to free credit monitoring

It might seem strange that you can’t immediately see your credit report any time you want, but that doesn’t mean you should ignore it. If you don’t pay attention, you could miss errors or become a victim of identity fraud. 

Credit monitoring services help track your credit report for changes or signs of fraud. People generally prefer credit monitoring services that can also help create a plan of action to improve your credit score and move closer to your goals.

We’ll review the features and benefits of free credit monitoring services and how you can get started with tracking and boosting your credit. 

What is a credit monitoring service?

Identity theft has become a growing threat. Reports of identity theft in the U.S. skyrocketed to 1.4 million in 2020, according to the Federal Trade Commission, more than double the previous year. When combined with other fraud and consumer issues involving credit bureaus, bankers, and lenders, there were 4.7 million complaints.

Even if you manage to protect your own information, data breaches from companies can expose personal information at scale. The 2013 Yahoo data breach, which remains one of the largest-ever security hacks,  exposed personal information like names, phone numbers, birth dates, and passwords from 3 billion user accounts. 

With enough sensitive data, scammers can try to open a new credit account and then make unauthorized purchases. 

A credit monitoring service keeps tabs on your credit report, alerting you when new items are added or if any major changes occur. By tracking the accounts and activity tied to your Social Security number, name, addresses from the past two years, and birthdate, you can try to catch cases of identity theft and resolve them.

Keep in mind that credit monitoring services can only alert you to changes and remind you to freeze your credit — they cannot prevent crimes. You’ll need to work with your bank, credit card provider, and the appropriate legal authorities to get justice and restore your credit if you’re a victim of identity theft.  

What to look for in a credit monitoring service

Like any other financial product, not all credit monitoring services are equally reliable. Here are some features to look for in a credit monitoring service. 

Alerts you to credit changes

First and foremost, a credit monitoring service should alert you to changes in your credit report, which is a detailed breakdown of your credit history. Most credit monitoring services will notify you when any of the following appear on your credit report:

• A company or an individual accesses your credit report.

• Someone opens a new loan or credit card in your name.

• A creditor or loan provider submits an item saying that you’re behind on payments.

• A public records company submits an item saying that you’ve declared bankruptcy.

• There’s a legal judgment made against you that appears on your credit report.

• Your personal information (like your name, address, or phone number) changes.

• Your line of credit changes.

• Your information has appeared on the dark web.

Look for a credit monitoring service that provides you with this information for all three of your credit reports. Not every creditor submits information to every credit reporting bureau, so it’s important to see all three.

The service should also offer email, text, and phone alerts for easy notifications.

Provides expert advice

Just getting information on your credit doesn’t improve your financial health on its own. If you really want to get your finances in shape, you’ll need to know where you stand and what steps you can take.

That’s why MoneyLion built the Financial Heartbeat ^SM , an innovative tool that empowers you to track your financial wellness. In the same way you might monitor your health, the Financial Heartbeat keeps tabs on your personal finance moves to achieve your goals. It distills your spending, saving, credit health, and insurance levels into an easy-to-use score that you can see in real-time.

Gives you access to your credit reports

When you receive a message about a change to your credit report, the first thing you’ll want to do is review the report to confirm. The best credit monitoring services offer you full access to your credit report. 

Highlight any details you don’t recognize and compare them to your financial accounts. The more regularly you monitor the report, the better, because it’s easy to forget about older accounts and activity. If you see an error, you can dispute it with the credit bureau. 

Shows your credit score

Three major credit bureaus (Experian, Equifax, and TransUnion) gather individual financial account and payment information, feed it into their scoring models, and come up with a credit score. In some cases, these credit scores can be different for the same person. Your credit score is a three-digit number that distills the information from your credit report, kind of like a grade on a report card. 

If you’re like most people, you probably care much more about your credit score than the contents of your credit report. When you use credit responsibly (like making payments on your loans or using credit cards responsibly), your score goes up. If you overextend yourself and miss payments or max out your credit cards, your score goes down. 

One of the best ways you can monitor your credit is by working with a credit monitoring service that gives you access to your credit score. 

How do I check my credit score?

Not every credit monitoring service offers you access to your credit score. Many monitoring services simply focus on watching your credit and alert you to any changes. But these changes may or may not significantly influence your credit score. 

Credit score providers aren’t always free. They may initially give you a free score — but also make you sign up for an expensive service. Or you might get one free score and then have to pay the next time you log in.

Make sure you read the terms and conditions to confirm that it’s actually free or affordable before you sign up for a credit score service. 

Is credit monitoring for you?

Do you need free credit monitoring? Here are some reasons why you might want to consider it.

Past victim of identity theft

Your personal information is likely already in circulation among thieves and scammers if you’ve been a victim of identity theft. After you’ve had one instance of identity theft, your personal information could be used for other types of fraud.

Credit monitoring services provide some assurance if you’ve had a credit scare in the past.

Remember that credit monitoring services can’t stop identity theft from occurring. However, they can alert you to breaches early on. This allows you to dispute fraudulent items and freeze your credit.

The effects of freezing your credit

Note that there are negative consequences to freezing your credit, too, and you will want to try to quickly solve whatever problem led you to put the freeze in place. If you’re applying for a major loan soon (like a mortgage or a student loan), freezing your credit can make the loan application take longer than necessary. You might also get rejected for accounts you actually qualify for if you don’t remember to unfreeze your accounts.

Work on building your credit

If you have no credit history or a low credit score, identity theft can set back you and your score. Signing up for a credit monitoring service can help you keep plans for a higher credit score on track.

Set up your credit for success

Remember that when you authorize a credit monitoring service to work on your behalf, you’re giving the service a lot of your personal information. Thoroughly research any company you’re considering before you sign up.

If you want help building or rebuilding your credit, check out a program like MoneyLion’s Credit Builder Plus. More than half our members raised their score by up to 27 points within 60 days.¹ This powerful membership costs $19.99/month and includes some nice little benefits: 

• 24/7 credit monitoring. You can check your credit score monitoring dashboard — powered by TransUnion — any time.

• Access to credit-building funds up to $1,000. Unlike with most credit builder programs, you’ll get some of your funds right away to help with your short-term needs — while also setting some aside and building credit.

• Access to 0%-APR cash advances up to $300 with Instacash^SM. With no interest. No monthly fee. No credit check.

• Cash back rewards up to $19.99 per month with the Lion’s Share Loyalty Program.

So start your lives together on the right foot! Get help boosting your credit with MoneyLion — and start sweetening your financial future together.