April 16th, 2015 by Jason M. Kaplan, Esq.
Quick Takeaway Facts about Credit Monitoring Services
Whether you are concerned about identity theft or seek to secure a loan for a car or a home, knowing what is happening with your credit is imperative in today’s world. Credit monitoring services can keep you up to date with any changes made to your credit report and keep you informed of your credit scores. However, the credit scores you receive from a credit monitoring service are usually not your true FICO scores, used by 90% of lenders in making lending decisions.
Why Should I Use a Credit Monitoring Service?
A credit monitoring service provides you with a copy of your credit report so you can verify the information on it (whether it is correct or not). In addition, a credit monitoring service should also alert you whenever there is a change to your credit report. There are a few reasons you would want to utilize this type of service.
- Identity Theft
Identity theft has existed for centuries, but not to the extent we see it today. As more financial transactions and information processing is done through electronic means, personal identity and financial information is transferred and shared through cyberspace at unbelievable speeds and frequency. Even though businesses go to great length to keep your information secure, every time you make a purchase or pay a bill with a debit or credit card, your information can be accessed by those who know how to break through the security measures which are in place.
- New Financing
When you are ready to purchase a new car or home, or need to apply for a loan for any reason, lenders check your credit to decide whether or not to approve the credit you are applying for. If you don’t know what is on your credit report, you can end up paying higher interest rates or even be denied the credit you are seeking due to the incorrect information a lender finds on your credit report. Unsurprisingly, it is common for information to be incorrectly listed on credit reports due to similar names and other personal information of people, along with human error in the reporting.
- Credit Score
Different credit monitoring services provide different levels of service, but all of them allow you to keep an eye on your credit score. The problem is, not all credit scores are the same. Each of the three credit reporting bureaus may have a different score. Each bureau calculates your credit score based on the information which has been reported to them, but not all creditors report to all three bureaus.
So how do you know what you’re getting and what information lenders are getting when you apply for credit? Watch Jason M. Kaplan of The Credit Pros explain how the differences occur and what you need to look for when choosing a credit monitoring service:
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