Credit scores follow you everywhere. They help you qualify for credit cards, student loans, and even housing. Yet, one in five Americans is unsure how to find their credit report.
Monitoring your credit report has become even more important now that data breaches have exposed personal information for hundreds of millions of people. Here we break down how to monitor your credit, what’s important, and what it costs.
What is Credit Monitoring?
Credit monitoring means keeping track of your credit report, which shows changes related to borrowing activity. A typical credit report displays credit card accounts, auto and student loans, mortgages, and negative events like overdue accounts sent to collections. These records are gathered from your banks and financial institutions.
Your credit report paints a picture of how often you pay back loans and credit cards on time.
Each credit bureau (Equifax, Transunion, and Experian) has its own data points they use to display a credit score that represents an individual’s creditworthiness and ability to repay loans. Credit scores play a significant role in determining whether you can open up more lines of credit.
Credit scores are three-digit numbers ranging from 300-900. While each lender defines a “good” credit score differently, the average score is around 704 and anything above 670 is decent.
Watching your credit helps you flag suspicious activities, including identity theft. According to reports filed with the FTC, consumers lost $1.9 billion in 2019 to fraud and identity theft. The most common cause of fraud was identity theft. Personal information is extremely vulnerable to data breaches.
Even if you simply google your name, you can find much of your personal information online and publicly available. Once an imposter has access to stolen data like your Social Security number, opening a new credit card is easy.
You can try to monitor your own credit by checking each credit card and loan statement regularly, but that doesn’t help you catch accounts opened by hackers.
Credit bureaus, banks, credit card companies, and some independent companies offer credit monitoring services. These companies send text messages or email alerts about changes in your credit report or when there are suspicious activities on your account.
Once you’re monitoring credit, it’s also important to know how to review your credit report.
Make Sure Your Personal Information Is Accurate
You are entitle to request one free credit report per year. When you receive your credit report, it will have:
- Marital Status
- Employment History
Request the removal of personal information, addresses, and employers that you are not connected with.
Pay Attention to Credit Inquiries
Every time you complete a credit application, the lender will pull your credit report. Your credit report captures these inquiries and continues to report them for two years.
Keep an eye on credit inquiries that you did not authorize. Unauthorized inquiries could be an early sign of someone trying to apply for a fake account. This early warning flag could happen even before you notice unusual credit transactions. According to the FTC fraud that causes the most damage occurs when activities go undetected for more than 6 months.
Verify All Accounts Listed In the Report
Go over every account in your credit report carefully. Make sure that you own all the accounts listed in your report. Any incorrect account may be a result of identity theft, which means you have to be especially vigilant.
The names on the credit report may sometimes be unfamiliar because the name of the lender is listed, rather than the name of the credit card brand. If you don’t recognize an account, review the opening date, the loan amount or credit limit, and the balance. These details may help you remember if an account is yours. You can dispute any accounts if you think they are fraudulent.
Comparing Credit Monitoring Services
Premium credit monitoring service providers charge subscription fees to provide alerts to credit changes. The major credit bureaus tend to focus on identity theft protection while MoneyLion has a Credit Builder service designed to help improve credit.
Here’s a quick comparison of credit monitoring services.
|Experian IdentityWorks Premium||$19.99 per month||• Monthly report from all three credit |
• Credit score tracking
• Alerts on attempted credit inquiries
• Identity theft monitoring and
• Fraud resolution support
|Equifax||• $16.95 (ID Patrol) |
• $19.95 (Premier and Family Plan) per month
|• Credit file monitoring for all three bureaus|
• Lost wallet assistance
• Credit report locking Automatic fraud alerts
• Identify theft insurance up to $1 million
|MoneyLion Credit Builder Plus||$19.99 per month||• Loan up to $1,000|
• 0% APR cash advances
• Reporting to all three credit bureaus
• Weekly credit updates on inquiries, score, and other factors
• Capable of building your credit by 60 points in 60 days
• Creates a savings plan
• Convenient app with daily money-saving offers and tips
As part of MoneyLion Credit Builder Plus membership benefits, you receive weekly updates on the top four factors that affect your credit score – positive payment history, credit age, credit utilization, and credit inquiries.
You are also eligible for a Credit Builder loan of up to $1,000. Since there’s no credit check requirement, you don’t have to worry about a credit inquiry affecting your credit score. In fact, you can get a loan with a low score or no credit profile.
After you sign up, you should receive some loan funds instantly. The remaining amount will be deposited on an interest-earning Credit Reserve account to help you save. You will get this money when you pay off the loan to spend on whatever you want!
Every month, MoneyLion will automatically deduct your monthly payment. You can break up the payments and time them according to your employment pay dates. Paying on time monthly improves your credit rating. On average, Credit Builder Plus members increase their credit score by 60 points within their first 60 days.
It’s never too late (or too early!) to start building your credit and understanding what your credit report means.
Building A Better Future With Better Credit
Your credit report plays a crucial role in determining your financial options. Errors could prevent you from getting credit cards or access to loans. 25% of people encounter credit report errors that could affect their credit scores, according to a study by the Federal Trade Commission.
Given how rampant identity theft and data breaches are, paying attention to your credit report keeps you out of trouble. Through credit monitoring, you can identify activity that might be fraud. The Consumer Financial Protection Bureau also recommends checking your credit report regularly.
Payment history is one of the most important factors when it comes to calculating your credit score, so it’s important to be on the right track. If you have poor credit, all is not lost. You can enjoy credit monitoring and a simple credit building strategy when you join America’s most powerful financial membership.