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What Is Credit Monitoring?

Keeping track of your credit score is vital. In short, credit scores help you qualify for the best interest rates which means you will pay less money on interest.

This is particularly important when it comes to applying for loans or having an overdue credit card balance. Having a good credit score can give you more favorable financing opportunities.

How Does Credit Monitoring Work?

Credit monitoring is when a service actively overlooks any new credit activity and notifies you regarding it. Additionally, not only does this service keep you in the loop on what activities can affect your credit score, it adds a layer of security.

For example, if you applied for a new credit card this credit monitoring service would notify you about that to make sure it was really you. These monitoring services overlook key financial information you have such as open accounts, missed payments, applications for loans or credit cards, and more. 

What Is Credit?

In short, credit is one’s ability to borrow money on the agreement that the borrower will pay this amount back later. Creditors (also known as the lenders) will lend a certain amount of money based on one’s creditworthiness which is symbolized by a borrower’s credit score. A credit score determines how credible the creditors view you based on past financial history.  

What Does Credit Monitoring Do for You?

Credit monitoring services notify the customer on any activity that could affect one’s credit score. If someone opened an account for the customer without their consent, this would be considered potential fraud and could harm the customer’s credit score.

Since these services overlook one’s major financial information, it is easier to detect fraud and identity theft. Therefore it allows the customer to react and resolve this activity faster.

What Doesn’t Credit Monitoring Do for You?

Even though credit monitoring services notify you on potential theft, they do not prevent it. The service is simply to notify, not to avert it from happening.

Additionally, if fraud does happen, this service will not be able to correct these errors on your credit report. In short, credit monitoring services cannot stop fraud from happening or keep your information safe from data breaches; it can only alert you on any new activity on your financial information.

What Is Three-Bureau Credit Monitoring?

Essentially, the three-bureau credit monitoring reports alert you any changes in your financial information through all the credit bureaus. These three credit bureaus are Experian, Equifax, and TransUnion.

These credit bureaus essentially track and maintain any data on one’s credit use. In combination with all three of these bureaus, monitoring services are more accurately able to find any errors and activity on your credit report.

How Do I Monitor My Credit?

You can monitor your credit in various ways. Firstly, you can check your credit report yourself annually by requesting a copy of it from Experian, from AnnualCreditReport.com. However, you can request this report periodically from all three credit bureaus to monitor it more than on an annual basis.

Additionally, you can use websites such as Credit Karma to check if your credit score has fluctuated since you last monitored it. Lastly, you can get a credit monitoring service to alert you of any new credit activity that is affecting your credit score. 

What To Look for with Credit Monitoring 

There are three main factors one should look for before using a credit monitoring service. These factors include: depth of analysis, notification of compromised credit, and credit triggers.  

Depth of Analysis 

Prior to choosing a credit monitoring service, one should see how in-depth the tracking and analysis of the monitoring service is. This includes looking if they have the three-bureau protection and what information they specifically track.

Credit monitoring services tend to look into the basics of financial information, but some services even notify if there are updates in your personal identifying information. Seeing how in-depth this analysis goes is vital.

Notification of Compromised Credit 

Another factor to consider is how quickly this credit monitoring service will notify you when a change does happen. How long does it typically take and how they will contact you once this happens.

Knowing this information can help you set realistic expectations of how quickly you can start to react if you are a victim of fraud. 


Lastly, one should see what triggers an alert from the credit monitoring services. What these services may distinctly track are dependent on the company.

For example some may alert when there is a fluctuation on new derogatory credit information or adjustments made to credit card balances. Knowing what is included and what is limited by the service is a determining factor whether which credit monitoring service is right for you.

How To Use a Credit Monitoring Service

Credit monitoring services can be both for free and for pay. Regardless of the price, you will have to open an account with your chosen company and give them your personal information.

This includes your date of birth, address, name, and last four numbers of your social security. A website such as Credit Karma is a great opportunity for those who wish to have a free provider and see how credit monitoring services work to see if it is the best fit for you.

Credit Monitoring vs. Identity Theft

As reiterated above, credit monitoring alerts the consumer of any credit activity however does not prevent identity theft from happening. These services are put in place so it allows the consumer to react faster if they were a victim of fraud.

However, they will have to go outside of their credit monitoring company to resolve this issue on their credit report. It is important to know that these services can not fix these errors on the report, they just notify you of them.  

How to Protect Yourself From Fraud

Having a credit monitoring service is a great way to ensure your financial information and credit report are in good condition. Opening an account can help protect yourself from fraud and activities that could tarnish your credit score.

Speak to your financial advisor about which credit monitoring service is the best fit for you. If you don’t have a financial advisor, read more here on how to get one.