Q and A on How to Monitor Your Credit Report
Without monitoring your credit report on a regular basis, your good economical habits (e.g. following a budget and paying bills on time) won’t help you any much.
As you probably already know, online credit fraud has become a huge problem and there are people out there that could use your identity to place inaccurate information in your credit file.
However, it doesn’t matter if the problem is outright fraud or human error, in the end, it is your responsibility to monitor your credit file and make sure that everything is accurate.
Q. Should You Use a Monitoring Service?
Advertisements abound by companies that offer to keep an eye on your credit activity for a fee. They will send you reports of account activity, alert you when a new account is opened in your name and some will also provide you with regular copies of your credit bureau files.
Q. Which Company Should You Choose?
The protection you receive depends on how often the company checks your account and how quickly they contact you if a potential problem is noted. What does the fee cover? Do they help you fix a problem if one occurs?
Do they offer guarantees that would protect you if a problem happened on their watch? If you identity is stolen, will they help you resolve the problem or cover expenses incurred?
Q. Can You Monitor Your Own Credit?
Of course you can and this is the path most consumers choose. You have the legal right to get a credit report from each of the major credit bureaus (TransUnion, Experian and Equifax once each year. The best practice is to request one of the three reports every four months.
That provides you with a quarterly view of any problems in your file. For a fee, you can obtain your credit reports more frequently than once yearly. Many credit companies will also alert you to suspicious or unusual activity on your account if you request it.
Q. What Signs Should I Look for to Prevent Fraud or ID Theft?
First, look at the personal information to see if your address or contact information has been changed. Other suspicious signs you should watch out for are:
- Can you see any inquiries about your credit that don’t make sense?
- Any time you apply for a credit card, there will be an inquiry about your credit standing.
- If you see requests for your credit file from sources you don’t recognize, call the credit bureau immediately.
- Have credit accounts been opened that you didn’t apply for?
- Are bad debts or late payments listed on accounts you didn’t open?
- Are their reports of legal motions filed in your name or motions filed against your name that you are unaware of?
Q. What Can I Do if My Identity is Stolen?
Immediately call one of the credit bureaus and ask for the fraud department. Request an alert to be added to your file. The credit bureau you notify is responsible for notifying the other two. That will guarantee creditors will contact you before opening any new accounts or making changes to existing accounts.
Close any accounts that you think have been opened without your knowledge. File a complaint with your local law enforcement giving them any and all details you’ve been able to compile.
This is the beginning of what becomes a long paper trail as you attempt to regain control of your own financial identity. It is often a frustrating experience but with diligence it can be overcome.
Send copies of any paperwork and forms you fill out to the three credit reporting bureaus to place in your file and fill out a complaint with the Federal Trade Commission. The FTC maintains a database of identity theft cases to assist local law enforcement.
Your credit file is critical to your ability to obtain a loan if you need one, buy a car or a house, or rent an apartment. With identity theft on the rise, your credit rating is not something you can afford to ignore.
Monitor your credit file on a regular basis to be certain the information in it is correct. I also recommend you to read my guide on how to avoid scams with debt management services and warning signs you should be aware of!