Credit Report Monitoring – Why Do You Need It?

Your credit report is the summary of your borrowing as well as repayment history.  This means that your unpaid bills, mortgage, credit card payments and other financial activities will be  included in your credit report. A bad credit report can have negative repercussions as it can lead to unfavorable interest rates or it can hinder you from getting your loan approved. Therefore, credit report monitoring is important as it provides you with the essential information about your credit score. This is a way to detect any suspicious financial activities due to fraudulent activities as well as identity theft. In the United States, credit monitoring is possible by getting free credit reports from credit reporting bureaus (Equifax, Experian and TransUnion).

 Who Needs To Monitor a Credit Report?

Everyone can check their credit report, but there are certain people who need to do credit report monitoring constantly. For instance, if you are a victim or have been suspected of committing fraud or identity theft, you need to make sure that your credit accounts are the same and reports made are not dubious.

On the other hand, people who have experienced a mix-up in their credit file should also monitor their credit report to ensure that other credit activities, which are not related to yours, will not be included in your financial history.

People who are going through divorce also need credit report monitoring.  Unfortunately, the breakup of a legal relationship can impact your credit negatively, thus monitoring your credit report ensures that your other half does not do damage on your credit report.

 How To Monitor a Credit Report?

There are many ways on how to monitor your credit report. This is especially true if you want to detect any fraudulent activities in your account. Below are the things that you can do for your credit report monitoring.

  • Ask major credit reporting agencies to place a free fraud alert on your credit report. Credit report alerts need to be renewed every 90 days. It warns borrowers to confirm their ID before they are issued new credit.
  • Review all activities in your bank and credit card statements and report any unauthorized activities detected.
  • File for a ‘credit file freeze’, which prevents lenders from accessing your credit report.  This will also prevent you from opening new credit accounts and you need to unlock it in order to apply for new loans.

Credit report monitoring provides early detection of any fraudulent activities in your account so that you can take immediate action before too much damage has been done with your credit report.