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Why Credit Monitoring Is Crucial For Consumers

By Louis Fabiano

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Published: 25Mar2010
Word count: 773
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Credit Reports are typically generated by talking to one of three major companies and setting up an account that will relay all the information regarding your credit report. These three companies are Experian, TransUnion, and Equifax. Within these three companies lies what makes up a credit report.

With the three separate credit companies, you as a consumer can get three unique credit reports. These reports will have similar information, but one or the other may contain bits and pieces that are not available publicly on your other reports. In order to maximize your credit report rate, a yearly check with all three companies is not out of the question.

To elaborate, a credit report is made up of various parts. One part is the consumer information, which includes your name, date of birth, address, and employer. Another part is the history of your accounts, dating back as far as the first time you have opened a bank account, to when you may have taken out loans or applied for loans.

Another part of credit reports that is often overlooked is the creditor information. The creditor information on a credit report from one of the three major companies will let you know the information needed to get a hold of and speak with a licensed creditor, or in some cases, the creditor already handling your accounts and loans.

The main idea behind a credit report is to let you know how you have handled your past loans, current loans, or any financial debt you may have. A credit report also has the added bonus of being able to show you if someone has stolen your identity and made loans under your name or similar crimes.

Regarding lenders and how they use credit reports, there are several bits of information that a lender can extract from a credit report. Some of this information, like your past loan repayments, will let the lender know If you as a borrower are responsible and pay your loans back on time. Some of the information on the credit report will also let the lender know whether or not you have a good track record with managing your finances, such as not having bankruptcies and other financial hardships.

If you as a previous borrower have an interest in seeing that your credit is secure, then a credit monitoring service might be the right choice for you. Some of the perks of having a credit monitoring service, like the 3 in 1 report offered by Credit Cards Professor's free credit report, include being able to check your credit score with all three companies on a whim, and being assured and kept up to date with any changes to your credit score almost within a week.

A major reason to have a credit monitoring service is to use it to combat identity theft. Identity theft means someone is using your information to apply for loans under your name, or other methods of adding debt to an account other than their own. A credit monitoring service means that you can also rest assured that if any sudden charges or loans get added to your name, you will be made aware of them in a timely manner and be able to deal with them right then and there.

An interesting method of checking your credit report would be monitoring it by requesting all three major credit report companies. Sounds familiar, right? Well, with this method, instead of requesting all three credit reports at the same time, you as a consumer would spread out your requests over the course of a year. This means that every 4 months, you would request a credit report. An added bonus of this method is that you can avoid a credit monitoring service.

Although it does provide a good methodology of tracking your personal credit score, a credit monitoring service will more than likely not provide you with tips and tricks on how to prevent identity theft other than alerts. One bit of common sense to hang onto is that of closing any unused accounts with banks or lenders that you have open, which you have viewed on your credit report. Closing these ahead of time when they are not being used can lower your risk of identity theft.

Lastly, a good credit monitoring service will include an insurance against unexpected loans and debt incurred while your identity was stolen. This means that the credit monitoring service will provide you with insurance equaling up to or close to 10, 30, or even up to 40 thousand dollars worth of insurance against identity theft. Definitely more than just another added perk towards monitoring your credit!

Author and publisher since 1999. Articles, stories and commentary have appeared in national magazines and are published on the internet. Mr. Fabiano has also been a featured speaker at online publishing and affiliate marketing conferences in the US, Canada and Europe. I author the following consumer finance related sites and communities: Payday Loans Credit Cards

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