As well as providing one of the best ways to detect identity theft, monitoring your credit will help you improve your credit score. Credit monitoring services instantly alert you of any changes to your credit report and take the necessary steps to address any negative changes to the report. To do this, most services provide an evaluation of your credit report and challenge or dispute any changes that negatively affect your credit score.
If you utilize the right credit monitoring service effectively, you can improve your credit score dramatically. In the long run, this will lead to improved (i.e., lower) rates on credit cards, car and home insurance, loans, and mortgages — saving you thousands of dollars in the process. As I frequently stress on this blog, maintaining a high credit score is crucial to reaching financial success. Monitoring your credit on a regular basis will make the amount of money in your bank account rise faster than an earned run average of a relief pitcher for the Tampa Bay Devil Rays.
For an excellent credit monitoring service that offers a Free Triple Credit Report and top-notch identity theft protection, click here.
What do credit monitoring services do exactly?
Brian Koerner, a finance expert from About.com, provides an excellent description of what credit monitoring services actually look for in a recent article. In great detail, Mr. Koerner provides consumers with insights on how services actually help prevent identity theft among other credit-related topics discussed in the article.
Per Mr. Koerner:
“Although you can purchase varying levels of service, generally, these services will monitor the following:
• Inquiries to your credit file. The service will monitor who is inquiring on your credit file. This information can be useful in detecting unauthorized activities.
• New account activity. The identity theft victims that suffer the most financial damage are those that a thief opens new accounts in their name. The service will monitor any new accounts that are opened in your name and report this activity to you.
• Address changes. Identity thieves have been known to change the address of a victim to their own, particularly when applying for credit. The monitoring will alert you to this activity so that if you didn't really move, you will know that a thief may be in your midst.
• Collection accounts. Unfortunately, many victims realize that their identity has been stolen when they can't get credit. If there is any activity on your credit report related to collection accounts, the monitoring service will notify you so that you can investigate it further.
• Changes to account information. The service will monitor any changes to account, which would include things like, if the account is refinanced, status, etc.
• Credit limit increases. Often one of the first things an identity thief will do is raise the credit limit on the victims accounts. The credit monitoring services will monitor this activity and notify you--you can then take action.
• Changes to public records. The service will monitor any changes to public records that would include, judgments, bankruptcies, etc.
• Changes to existing accounts. The service will monitor any negative changes to existing accounts such as delinquencies, etc.
• Closed accounts. Any accounts that have been recently closed will be flagged by the monitoring service and reported to you.”
News From the World of Credit Reports and Credit Scores:
In a column that appeared in the Dallas Morning News on Monday, financial columnist Pamela Yip discuses the latest developments in today’s insurance industry controversy — regarding a recent report released by the Federal Trade Commission that angered several civil rights organizations.
According to the FTC study, it would be impossible for the organization to come up with an alternative scoring model that would continue to predict risk effectively and decrease the differences in scoring among certain ethnic groups at the same time. Jerry Johns, who was interviewed by Ms. Yip for the column, agrees. Mr. Johns — president of Southwestern Insurance Information Systems, an industry organization located in Austin, Texas — says, “Race and ethic backgrounds have nothing to do with credit histories.”
However, as I discussed in my previous two posts, consumer groups have strongly condemned the FTC study. In a joint statement, the groups said, “The relationship between insurance credit scores and race is so strong that even though the FTC used data handpicked by the industry, it found that credit scoring discriminates against low income and minority consumers, and that insurance scoring was a proxy for race."
What is your take on the situation? Leave a comment below.
For our British readers: In a column yesterday, Alan Tomlinson, a publisher for 24dash.com, talks about how Equifax — one of the three major credit bureaus — is warning that consumers “need to be careful that they aren’t still paying for their summer holiday well into the winter — hitting their credit rating.”
Do you have a credit-related question or a suggestion for the blog? Feel free to send us an email at creditreportandscores@gmail.com.
No comments:
Post a Comment