5 Reasons Credit Monitoring Services Are More Effective Than Just A Free Credit Score

Written by Banks Editorial Team
3 min. read
Written by Banks Editorial Team
3 min. read

Have you considered using credit monitoring services? How often do you check your credit score? While reviewing your free credit score each year is of utmost importance, it may not be enough in some cases, especially if you are vulnerable to identity theft, or if you plan to apply for a loan.

A credit monitoring service can keep your credit report under scrutiny all the time and may immediately alert you in case there’s any critical change. There are many services that you can use to monitor your credit score, meaning you’ll not have to do it by yourself.

Credit Score Apps

Experian Boost is a free service that allows you to add eligible, on-time payments to your credit report, potentially increasing your credit score.

5 Reasons Why to Use Credit Monitoring Services

1. It Can Help You Plan Your Finances In Advance

There are hundreds of factors that can negatively impact your budget and by extension your credit score. These may include increasing your total balance owed, skipping a payment, closing an account, or adding credit inquiries, e.g. when shopping for a new credit card or mortgage.

The effect of these factors may not be instantly evident to you without using credit monitoring services. In short, credit monitoring services will enhance your financial literacy and help you plan ahead rather than wait until things get out of hand.

2. It Can Optimize Your Credit Score

A credit score is a number used to determine your creditworthiness. The higher your credit score, the better as this shows you are highly likely to repay your loans in time. This also means you can get a loan at a lower interest rate.

In other words, whatever type of credit you are applying for, be it a mortgage, an insurance policy, a credit card, or any other type of loan, your lender will have to check your credit score.

In this regard, credit monitoring services can help ensure that your credit reports do not have any fraudulent activities that can lower your credit score. And in case any such activities get detected, you will have a good time to address them to maintain or increase your score.

3. It Can Protect You Against Identity Theft

Identity theft cases are very rampant in the U.S. In 2016 alone, almost 400,000 people reported cases of identity theft to the Federal Trade Commission. Some of these cases involved credit card frauds, account takeover frauds, and many other forms of frauds.

Using a good credit monitoring system can help detect and prevent identity theft early enough. The detection will happen before any serious damage occurs to your financial reputation and your finances.

A good credit monitoring service will also notify you when someone makes any hard inquiries on your credit report. This is an avenue for identity theft.

Hard inquiries are credit inquiries made by lenders who review your credit because you’ve applied for a loan with them. When someone makes such inquiries without your authority, good credit monitoring services will flag them.

If there have been too many inquiries, you may decide to put a freeze on your credit contact or report the company and put a stop to it.

Credit Score Apps

Experian Boost is a free service that allows you to add eligible, on-time payments to your credit report, potentially increasing your credit score.

4. It Can Help you know the best time to apply for a loan

Your credit score keeps on changing from month to month and waiting until next year for a free credit score if you want to apply for a loan may not be helpful.

Just a small change in your credit score can affect the amount and the type of loan you can apply for, and this will also affect the interest rate you are eligible for.

For instance, if you were to submit a late repayment or miss a payment of your credit card, the credit monitoring services would notify you as soon as your lender reports you to the credit bureau.

This will help you to sort out the problem as soon as possible. And when your credit score goes up, you can take that opportunity to take a new loan to finance a home purchase or refinance your mortgage.

5. It can help Check for inaccuracies and correct them immediately

Mistakes are bound to happen everywhere, even on your credit report. Rather than waiting until you have applied for a credit to find out about the mistake and have it corrected, a good credit monitoring tool will help you know the mistake in good time. You can then contact your lender and have the issue sorted out. This will prevent delays and will also protect you against any higher interest rates.

The Best Credit Monitoring Services

There’s clearly a number of benefits associated with credit monitoring services. However, not all the services are the same. You’ll have to choose one that serves you better even if it means paying for it. You need to look for credit monitoring services that can provide you with real-time monitoring and can track your credit score over a long period so you can see its up and down movements.

Good credit monitoring services should also provide you with a breakdown of what factors impact your credit score and what your stand is in regard to those factors. This is something worth investing in.

You may also like

Learn about the different features and services to identify what the best identity theft protection for you and your family is.
Read more

Advertisement Disclosure

Product name, logo, brands, and other trademarks featured or referred to within Banks.com are the property of their respective trademark holders. This site may be compensated through third party advertisers. The offers that may appear on Banks.com’s website are from companies from which Banks.com may receive compensation. This compensation may influence the selection, appearance, and order of appearance of the offers listed on the website. However, this compensation also facilitates the provision by Banks.com of certain services to you at no charge. The website does not include all financial services companies or all of their available product and service offerings.