What's the Big Deal About Credit Monitoring?

By George Stargell, Senior Editor   

To some people, credit monitoring services are just another way for companies to make money off consumers worried about their credit. To others, regular credit checks can provide peace of mind and help them stay current on their recent credit activity.

So who's right? It probably won't surprise you to learn that people who monitor their credit are taking a recommended step toward managing their credit histories in an effective, responsible manner.

And you don't have to pay a credit monitoring service — you can do it yourself:

• The Fair Credit Reporting Act (FCRA) offers every American citizen a free annual credit report from each of the three credit bureaus (TransUnion, Equifax, and Experian). By staggering your requests to get one credit report from a different bureau every four months, you can perform high-level credit monitoring throughout the year.
• There are also programs available (for a fee) that offer you unlimited credit reports throughout the year. These programs typically provide additional services as well, so a little investigating can help you decide whether the cost is worth the value of being able to monitor your credit reports whenever you want.

What about paying for credit monitoring services?

The value of a paid credit monitoring service is that it alerts you whenever there's activity in your credit files. These alerts can help you:

• See who's making inquiries into your credit history
• Learn when there’s suspicious activity (which could be a sign of identity theft) occurring in your files
• Find out whether that check you sent in last month was received before the payment due date

While these benefits are also available through do-it-yourself credit monitoring, alerts can reach you more quickly than they might through personal monitoring. And when it comes to identity theft, the sooner you investigate, the better off you usually are.

However you do it, credit monitoring is an important tool. It can protect you against the high costs of identity theft while also helping you take greater control of your credit history — and, with it, your financial future.