The Definitive Guide to Credit Monitoring Tools

Everything you need to know about credit monitoring in one place.

Credit monitoring tools allow you to track your credit reports and alert you when activity occurs.

It’s become more important as personal information has increasingly come under attack in recent years. In 2018 alone over 27 million records have been exposed in 789 breaches,  according to the ID Theft Resource Center.

People are starting to keep closer tabs on their credit to ensure that all their reports are accurate, up-to-date, and heading in the right direction.

Enrolling in a credit monitoring service is a proactive step you can take to safeguard your personal information.

Why should you monitor your credit?

Let’s say, for example, someone opens a line of credit in your name using your social security number. If you’re not in the habit of monitoring your credit, you could go months without noticing.

Suppose the thief doesn’t make timely payments, which is likely since they are a criminal—your credit will take the hit. Once you discover the fraud, it will have already hurt your credit score and will take time and expert help to repair.

According to the Fair Credit Reporting Act (FCRA), the three bureaus must provide consumers with one free credit report each year. They do so through AnnualCreditReport.com. However, one per year is often not enough.

If you have credit monitoring, you will usually receive notifications within 24 hours of an activity. This enables you to take prompt action and correct any inaccuracies before they cause damage.

It also keeps you informed about the state of your credit and how to improve it.

What services do credit monitoring companies provide?

Every company has different offerings. However, they often track the following types of activity:

  • New credit accounts
  • New public records
  • Changes of address
  • Hard inquiries
  • Changes to existing accounts
  • Credit utilization
  • Dormant accounts
  • FICO and VantageScore credit score changes

When choosing a provider and plan, be sure to check which activities they monitor as well as which reports.

According to Katie Ross, Manager of Education, Development, and Housing at American Consumer Credit Counseling (ACCC), not all lenders report to all three credit bureaus. Further, she points out that each bureau may update client information at different times and scoring may vary.

Being so, it’s important to track all three reports: EquifaxExperian, and TransUnion. Some credit monitoring plans only track those from one or two bureaus.

Also, review how often the reports are monitored and how often you will receive alerts. Is it real-time, daily, or monthly?

All of these can vary from one provider to the next and can impact the quality of service you receive.

Credit monitoring frequently asked questions FAQs

Now, let’s take a look at some common questions regarding credit monitoring.

What is the difference between credit reporting and credit monitoring?

Some people find credit reporting and credit monitoring confusing. Credit reporting involves companies that collect information on people and businesses to build reports like Experian, TransUnion, and Equifax.

Credit monitoring is a service that keeps tabs on the reports to inform people and businesses about any activity.

What is the difference between credit monitoring and identity theft protection?

You will notice companies offering identity theft protection along with credit monitoring. You may wonder how that differs from credit monitoring alone.

Credit monitoring involves tracking your credit score and reports from the various credit bureaus. The main benefit is that you remain aware of activity on your account.

On the other hand, identity theft protection involves tracking your credit report activity, credit scores, and additional monitoring to secure your identity.

The additional monitoring can include court records, arrest records, payday loan applications, check cashing requests, social media monitoring, and websites where criminals trade or sell stolen information.

Additionally, identity theft protection often includes insurance coverage in case your information is stolen.

In short, identity theft protection is a more advanced service that monitors a wider range of data. It helps to ensure that someone else doesn’t misuse your information and protects you if they do.

How do companies monitor your credit?

Typically, you’ll sign up and the company you hire will communicate with each of the bureaus on an ongoing basis. They monitor your reports for the activities included in your plan.

Your features and services will depend on the provider and plan you choose. Often, you will gain access to a dashboard that keeps your information organized and easy to understand.

If something happens, the company will alert you via your selected channel of communication (SMS, email, app notifications, etc.). You may also receive updates and summaries on a regular basis.

Is credit monitoring worth the investment?

Should you invest in credit monitoring? Well, let’s consider the alternative.

If you don’t, you are limited in how often you can check your credit reports with the three main bureaus. Here’s a quick look at what each of the bureaus offers for free:

  • Experian: Users get free monthly monitoring of the Experian report for new credit inquiries and new accounts. It also includes a monthly Experian report and FICO score report.
  • TransUnion: TransUnion offers one free credit report per year.
  • Equifax: Equifax offers just the one free credit report per year.

While Experian allows you to access your report monthly and even offers some monitoring services at no cost, the other two bureaus don’t.

Further, with the exception of Experian, you won’t receive notifications and alerts. So, you will have to go in and inspect the reports yourself. As a result, there’s a higher risk for missing an update or action.

If you want to build your credit or prevent identity theft, credit monitoring is likely to be worth it for you. Often, it will provide 24/7 access to your credit report, credit score tracking, notifications, and more.

Make sure to shop around, compare costs, and see if the cost matches the value for you.

How much does credit monitoring cost?

Prices vary depending on the number of credit bureau reports that are monitored and whether other services, such as identity theft protection, are offered.

What to ask when looking for a credit monitoring company

When trying to decide which company is right for you, consider the following:

How many bureaus does it monitor?

It’s important to check all three.

Does it provide FICO credit score tracking?

Most lenders and service providers look at your FICO scores.

How are the ratings from past customers?

Check what others say about their experience with a credit monitoring company here.

Does it include identity theft insurance and other features?

Compare the cost with and without bundled services and only pay for what you need.

How much does it cost?

Once you’ve decided what services you need, the price is usually the key differentiator.

Does it provide online credit education?

Although nice to have, you can probably get all the credit education you need for free with us.

How does it compare to the competition?

Check the rates and services of at least three companies before choosing one.

Do they help you fix errors on your credit report?

Not all companies provide this service. Learn more about credit repair here.

How often are the reports updated?

Remember you can check your credit reports for free once a year, so credit monitoring services are pointless if they don’t offer you multiple updates a year. The gold standard here is unlimited access to your three credit reports. Check the alert and notification time frames/channels meet your needs before creating an account.

Weigh the pros and cons of various companies to find the best fit for you.

Head over to our Credit Monitoring database where you can compare the services and prices of the leading credit monitoring companies.