The term “credit monitoring,” taken at its simplest definition, is the act of keeping tabs on your credit report. The major reasons all consumers should monitor their credit on a regular basis are as follows:
- Mistakes: credit monitoring allows consumers to be aware of mistakes made by creditors that impact their credit. It is surprisingly easy for a creditor to make a small mistake that will affect your account with them – and your credit – in a big way. Your payment, made on time, might be accidentally delayed in a bank’s labyrinthine systems, causing it to be applied to your account late. Or the same convoluted system may apply your payment to the wrong account of even lose it altogether. In this situation, late fees are the worst of your worries. One late payment can knock serious points off a credit score. Depending on the loan terms, this might even cause the account to default. Finding out about mistakes early through credit monitoring allows consumers to dispute them early and gives much better odds of winning the dispute.
- Fraud: one lost or stolen credit card that ends up in the wrong hands can mean enormous debts in no time. The only thing worse would be the theft or accidental loss of a card that you forgot about. Without regular credit monitoring, it could be quite a long time and a lot of credit report ruining charges mounting. Regular credit monitoring can catch this type of credit fraud quickly, allowing you to cancel the card and clear up the issue with the credit card company. In the event of credit cards being used by criminals, regular credit report monitoring can mean the difference between a no loss at all and the loss of thousands.
- Identity Theft: this is like credit card fraud, only worse. Instead of filching your credit card or finding a charge plate you have misplaced, identity thieves actually use your personal information to open new lines of credit on the premise that they are you. This isn’t using a pilfered credit card to buy some clothes and television sets. This is using your credit and identity to buy cars, open sizable personal loans, apply for multiple credit cards and much more. Unchecked, identity theft can absolutely destroy your credit rating. The longer it goes on, the worse it gets. Obtaining a copy of your credit report on a regular basis is a sure way to protect yourself from identity theft. If you can check your credit monthly, you’ll see these new, unfamiliar accounts and be able to take action. With today’s technology, subscribers to the major UK credit reporting agencies – Experian, CallCredit and Equifax – can access their credit any time online. Imagine checking your credit report online every day. The crooks wouldn’t stand a chance!
- Overall credit health: even if you haven’t been the victim of banks’ mistakes or criminal fraud there are still great reasons to monitor your credit regularly. With regular credit checks, you can keep a close eye on your existing accounts and how they affect your credit score. A regular credit report can help you track trends. Is your credit score declining? Maybe you’re spending too much on a card or two or not paying enough monthly. Keeping tabs on your credit can assist you in maintaining good credit by giving you an excellent tool to manage existing credit. A regular credit check will also help you make purchasing choices. IS now the time to apply for a home mortgage or new car loan? A quick credit check can help you decide before you fill out that loan application.
The major credit agencies in the UK offer various products for monitoring your credit. They can be do-it-yourself services like a one-off reports whenever you feel like you need one, or advanced subscription products that allow consumers to get reports on demand, in writing or online, any time of day or night. These credit reporting agencies also offer proactive monitoring solutions that monitor your credit for you and notify you of changes made by you – or others. Depending on the service you select, the agency will notify you of suspicious activity like sudden large charges or charges made far from your residence, and other activities possibly related to fraud. Other options include services that actually contact you when accounts are opened, blocking retailers and banks from allowing lines of credit to be opened until you give verbal confirmation. Regardless of whether you choose to monitor your credit yourself or if you subscribe to a service like these, it is crucial that every consumer monitor their credit regularly. It is the key to perfect credit health.
