Perhaps you’re wondering, “What is credit monitoring?” Monitoring services keep track of changes in borrowers’ behavior and alert consumers to potential fraud. Monitoring your credit report can protect you from identity theft, which is when your personal information is stolen and used without your permission. Using a credit monitoring service, a credit card account holder can identify and be alerted to any patterns of fraudulent use of the impacted card.
How Credit Monitoring Works
Monitoring your credit is exactly what the name implies—monitoring it. Your credit history is tracked, and you are notified of changes by email, text, or phone. It is true you can do some of this on your own, however, these services are much faster and more automated. Depending on your provider, your credit monitoring service may report the following:
- Hard inquiries on your credit report, such as credit applications filed in your name
- Opening of new accounts in your name
- Payments and balances on your credit products
- Your credit file has been updated with a new address or name
- Information about you on the dark web, such as your social security number, email address, and passwords
Although it may seem like credit monitoring services keep track of a lot, they have their limitations. Below, we explain the shortcomings of credit monitoring.
Where Credit Monitoring Falls Short
Monitoring your credit report is a great way to spot potential signs of fraud, but it is not a holistic approach to preventing identity theft and unauthorized transactions. A credit monitoring service can alert you to possible theft and provides resources to help you defend against it, but it cannot guarantee fraud prevention. At best, they alert you instantly if something goes wrong so you can take action right away. Here are several things credit monitoring doesn’t do:
- Prevent someone from applying for credit and opening new accounts in your name
- Safeguard your information against data breaches
- Avoid having your credit card swiped
- Let you know if someone has withdrawn money from your bank account
- Be alerted if someone files a tax return in your name and receives your refund
- Stop phishing emails
- Report fraud
- Fix credit report errors
- Freeze your credit
Is it Necessary to Monitor My Credit?
A credit monitoring service is beneficial because identity theft is a possibility for everyone. You are alerted to changes in credit reports so that you can review them and address an issue before it becomes a larger, more costly problem. Whenever we shop, bank, pay bills, or socialize online, we risk exposing our personal information. In a recent study, it was reported that total identity fraud in the U.S. reached $16.9 billion. As identity theft increases, it becomes more challenging to prevent or eliminate the damage they cause. It can be stressful to experience financial hardship. With Briteside Solutions, we strive to empower consumers and make them personal financial experts. If you need guidance or advice regarding your credit, contact us today to get started.