The Top Three Questions And Answers About Credit Monitoring
Credit monitoring is a relatively new service in the financial marketplace. Though many consumers are convinced that they have to have it, not all consumers clearly understand what credit monitoring is or what credit monitoring does for them. As a result, the marketplace is full of questions about credit monitoring services. Here are the top three questions about credit monitoring and their answers, to ensure that you are a member of the informed marketplace.
What’s the point?
The point of credit monitoring is to get a clear picture of your credit score and prevent fraudulent activity. Although the FACT Act of 2005 entitles all consumers to one free credit report each year from each of the major bureaus, most experts feel that this is not a sufficient level of monitoring to prevent fraud. Also, for consumers in the process of actively acquiring new lines of credit for home loans, new credit cards, or auto purchases, and up to the minute idea of your credit score can be very helpful.
A popular statistic is that consumers who catch identity fraud in the first five months typically incur only minimal losses. If a thief has accounts open in their name and it isn’t caught for a very or more, it can be very hard to recover financially and repair one’s credit score.
Credit monitoring can also be tailored to monitor only certain types of activities. Frequent travelers, for example, might be less interested in hearing about out of state or out of country purchases, but they may want to know immediately if new credit lines are opened in their name. This kind of tailoring allows you to maximize your benefits from credit monitoring programs.
Where can I get credit monitoring and what will it cost?
Credit monitoring is available from several different players in the market. The largest providers of the service are credit card companies and credit bureaus, with banks and consumer groups accounting for most of the rest of the market. You can do research to see which local providers are most convenient for you to use in your area, or you can go with one of the national credit bureaus or consumer groups.
A key choice to make is whether you want a report from just one credit bureau, or if you want a credit monitoring services that pulls information from all three bureaus. With single bureau monitoring, you get information only about activities that are transacted through that bureau. If a credit check and account application happens with another bureau, it may not automatically trigger an alert if you have a mono-line service.
In terms of costs, the price of credit monitoring services varies greatly with the basket of services being offered. Real-time updates cost more than quarterly reports, and multiple accounts cost more than monitoring just one. In general, mono-line monitoring is less expensive that monitoring across bureaus, although optional features can change this.
On the low end, there are monitoring packages that go for $9.95 or $99 annually. The midpoint of the market seems to be $14.95 monthly. The most expensive monitoring services range from $30 – $50 per month. Typically, these charges are billed to you automatically on your credit card statement or debited directly from your bank account.
Does credit monitoring impact my credit score?
Many consumers are concerned that credit monitoring services will impact their credit score. The roots of this concern do lay in a factual occurrence—credit inquiries, which can impact the overall score. However, formal credit inquiries are different from the glances that are used by credit monitoring services. Typically, formal credit inquires are done by businesses looking to see if you are creditworthy for the purposes of trying to open a new account.
Among credit rights, you have the right to look at your own credit information without triggering any impact on your credit score. Credit monitoring services fall into this right, which means that the ongoing monitoring of your credit accounts fall within your rights. Your participation in credit monitoring services should have no impact on your credit score, even if you sign up for advanced monitoring services that provide daily or weekly updates.
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