Choosing The Right Credit Monitoring Service

Unless you are a person who diligently follows your own credit report, keeping track of every new itemized detail, you will benefit from a reputable credit monitoring service. The thing that seems to have more currency and merit in the lending industry for consumers is a good credit score. Monitoring what creditors report about your purchases and payment habits is the only way to ensure your score stays about 650 so that you have a fighting chance of being approved for a loan.

Credit monitoring agencies can check your credit report as frequently as you instruct them to monitor it. Of course, more frequency equals a higher payment for the company’s services. Some offer daily monitoring for clients who may be in the process of closing on a house or some other large purchase. The company alerts you right away if there is unusual activity or a negative report and offers you fraud solutions if you need them.

A good credit monitoring company will provide you with the following services:

1) Reports from all three major credit bureaus. The reporting for free credit reports from all 3 bureaus is not always synchronized. You could possibly have an unblemished credit report at one bureau and a lowered credit score at another because of some negative activity. The three bureaus are Equifax, Transunion and Experian. Many companies boast that they report from all three bureaus but verify this information with both the company and other clients.

2) Fast, seamless turnaround. How much impact would a credit monitoring service have if it could only issue weekly reports or if it could only get information to you in three to five business days? It would not be very effective at all. The average turnaround time for a good monitoring service is 24 hours.

3) A monthly bill that is less than $20. In fact, it should be no more than $15 per month. If you pay more than this amount, you should double check your itemized statement from the service. Either you are paying for an extra service that you do not know about or the company is charging far too much for its services. Some monitoring services tack on identity theft insurance because it is one of the incentives they offer at the time you become a customer. The problem is they never bother to tell you that this is something you are paying for with your monthly bill.

4) Multiple methods of accessible contact. While much of the contact provided by credit monitoring agencies will be by email or phone, you need to make sure this contact is not constrained by hours of operation or days of the week. Phone support should be 24/7 and email contact should be real-time response. If the company offers online chatting or text message contact, that is certainly a plus.

5) A specific list of what exactly will be monitored. Some agencies publicize their commitment to alert you if your credit report or credit score changes in any way good or bad, but they should also alert you if there is suspicion of fraud or if a new account appears in your name. What they report is vitally important for monitoring.

6) Explanations. Good credit monitoring services not only deliver the news that something has changed on your credit report, but they also tell you why it has changed. The best agencies follow up their explanations with sound advice on how to improve your report or your score.

7) A free credit score trial offer. Giving customers a free trial period is as good as placing a warranty on your services. Companies that choose to do this are solid and serious. Trial periods typically run from seven to 14 days, though some will give customers an entire month to try out services.

8) An option to receive monitoring for either short- or long-term periods. You do not want to be involved with a service that tries to lock you into a contract and gouges you for early cancellation fees. This is not wireless phone service; it’s credit monitoring. Be sure that you can cancel the service when you no longer need it without penalty.

9) Classy marketing. Companies that have to secure customers through spam messages or an e-campaign that feels like a multi-level marketing scheme will probably handle your credit report the same way. Avoid them at all costs.

When you are selecting a credit monitoring service be sure that you move at your own pace. You never want to be rushed into a decision and hastily choose a company because you are afraid of not choosing them. If they offer you the world now, the same world will be up for grabs when you make up your mind.

Everything About Credit Reports

Credit reports are the main source for discovering whether a borrower is worthy of receiving a loan for a home, automobile, or other reason. A credit report is an official history of an individual’s financial activities. It contains information about one’s accounts, whether active or inactive, and shows if such accounts are consistently paid in a timely manner. In addition, it lists the total combined amount one owes to all his or her creditors, as well as the amount of credit that is still available to the person. Such information will stay on an individual’s credit report for seven years, with the exception of personal bankruptcy, which will be visible for ten years.

Credit reports also include lenders’ inquiries and legal actions such as repossessions, liens, and property foreclosures. The majority of reports also list information such as the account holder’s employment history, previous addresses, and other personal data. A person’s credit report can be accessed by landlords, insurers, employers, lenders and other individuals who are allowed to review such information.

Understanding Good and Bad Credit Scores

Every person’s credit score will fall somewhere between 300 and 850. A low score indicates a poor credit rating, while a high score shows that the individual is credit worthy. This is how banks and other lending institutions determine if a borrower is a good risk, or if there is a likelihood that the person will default on a loan. Credit scores between 680 and 700 are considered good. Those with a score of 700 to 750 will typically enjoy low interest rates on most loans. Those with scores of 760 or higher are regarded as very low risk customers by most lending institutions, and such consumers will find it easy to qualify for loans and other mortgages. In addition, those who have maintained good credit frequently receive offers for credit cards and other types of loans.

Major Consumer Credit Bureaus

The three main credit reporting agencies are TransUnion, Experian and Equifax. These three agencies gather similar facts concerning consumers’ payment practices and credit histories. However, all three bureaus have regions and cities in which they are more established than others, which gives them an advantage over the other two agencies in those specific parts of the country. This means that credit scores from the three bureaus will not always reflect the exact same information, making it possible for each agency to deliver a slightly different score. Certain banks and other lending institutions may rely on only one of the three credit reporting agencies when running credit checks on applicants, while others use all the companies and base their decisions on an average of all three scores.

Another fact of which many consumers are unaware is that each credit reporting agency uses a different method of calculation when determining one’s credit score. Such methods may include information such as the total amount owed to all creditors, and the amount of any open lines of credit still available for his or her use. Also typically included in such criteria is the number of times the person has paid a bill late, and the number of times he or she has applied for credit in the past twelve months. The latter will show up on the report as an inquiry, indicating that a bank or other lending institution has inquired about the person’s credit history to determine if he or she is a good risk for a loan.

Credit Reporting Errors

Numerous individuals are under the impression that credit reports are always up-to-date and accurate; however, this is not the case. Often, one or more of the credit bureaus forget to update a consumer’s report, or fail to remove negative information that is inaccurate or outdated. This can result in financial problems for the consumer, as well as the possible denial of future loans. It is never wise to assume that the credit agencies will keep consistently perfect records, as clerical errors occasionally occur in all types of record keeping. For this reason, one should keep his or her own records, and immediately report any discrepancies.

Reporting Errors and Suspected Fraud On Your Credit Report

A consumer should report errors on his or her credit report in writing to the agency that he or she thinks has recorded erroneous information. The letter should list each disputed item, with a detailed explanation of why he or she believes the information is inaccurate. Copies of any evidence one has should be enclosed with the letter, and the Federal Trade Commission–FTC–recommends mailing it registered or certified to have proof that it was received.

The credit bureau has 30 days to respond to the consumer’s letter, and one should review all correspondence upon receipt to ensure that disputed items have been erased, or an explanation has been given from the credit bureau regarding the information’s validity.

Identity Theft

With the recent increase in identity theft and other types of electronic fraud, it is essential that one check his or her credit history on a consistent basis and review the information for accuracy. This is the best way to prevent a problem from getting out of hand. Once an individual’s personal information has been stolen, another person can use the data to apply for loans and open credit card accounts, resulting in debt being accrued under the innocent party’s name. Unfortunately, the victim of such fraud is frequently held responsible for the debt unless he or she hires an attorney to rectify the problem. Often, the person must defend himself or herself in court, which can be a stressful and embarrassing occurrence for most individuals. For this reason, it is wise to view one’s report on a regular basis in order to head off problems before they begin.

The FTC states that the Fair Credit Reporting Act–FCRA–offers free yearly consumer credit reports from the three primary agencies to every consumer. Such a free gov credit report can be obtained through the Annual Consumer Credit Report website. This website offers free instructions for obtaining one’s report online, by telephone, or through the United States mail. Both the consumer’s date of birth, and his or her social security number are required when the request is made, and the FTC states that all three credit bureaus have permission to ask for any additional information they deem necessary to identify the person submitting the request. In addition, consumers can order copies of all three credit reports at the same time, or they can choose to stagger their orders throughout a twelve month period, such as ordering one from each bureau at four month intervals.

Benefits Of Acquiring Your Credit Report

There is a vast array of benefits associated with acquiring one’s official credit report regularly. Such benefits include the opportunity to discover and correct mistakes on the report, as well as to see exactly what various insurers, employers and lenders will see when the report is pulled. Certain individuals may even find signs of identity theft, which can be dealt with immediately, before it causes a major problem.

Credit Monitoring Services

There are various credit reporting agencies, lending institutions, and other organizations that offer credit monitoring services for approximately $15 per month. However, such rates can vary significantly from one agency to another. These services typically include access to credit scores and credit reports, as well as notifications to consumers about important changes to their credit histories. For example, a consumer will be notified if a new loan or credit card account has been opened under his or her name, or if a creditor has reported that one of his or her accounts has been closed or is delinquent.

Weighing the Pros and Cons of Credit Monitoring Services

It is important to understand that not all monitoring services are fool-proof. Many agencies of this type have been criticized for failing to provide protection from identity theft to their clients, which is the primary reason consumers enroll in such services. Sometimes, the reason that monitoring agencies fail to protect a consumer from identity theft or similar fraud is because they often report changes occurring at only one of the three major credit bureaus. However, as previously mentioned, a person’s credit history can vary considerably among the three companies, making it important to receive notification of new or suspicious information being posted on all three credit reports.

Regardless of one’s credit history, whether good or bad, it is important to understand the aforementioned information in order to make wise decisions concerning loans and other types of debt. It is also wise to visit the websites of each of the primary credit bureaus in order to familiarize oneself with how each one calculates credit scores. The internet is also a good source for learning more about how one’s credit history can affect his or her life and future.