Hiring someone to monitor your credit or score without a specific purpose is an empty exercise. If you’re trying to get to a certain credit score so that you can make a large purchase like a home or a car, however, then a professional monitoring service makes more sense. Also, if you are a “credit worrier,” then a monitoring service may be right for you.
Your lender’s score may well differ from the one you get because it may come from another company (FICO, VantageScore, a credit bureau, and so on) or because the lender applies its own algorithms based on proprietary factors that it weights based on its specific business experience.
Monitoring on your own
You can monitor your credit on your own by taking these simple actions:
Get a free copy of your credit report every 12 months from each of the three major credit-reporting agencies. Stagger the ordering so that you get a different report every four months. Review them and dispute any inaccuracies.
Be sure to get a free credit report if you dispute an item on your report. You’re entitled to a free report to make sure that the mistake has been removed.
Get extra free copies of your credit reports directly from the bureaus (not from www.annualcreditreport.com) if you live in Colorado, Georgia, Maine, Maryland, Massachusetts, New Jersey, or Vermont. These states require that you be allowed an additional free report annually — except Georgia residents, who get a total of three free reports a year from each bureau. Puerto Rico also requires that residents be given free credit reports as well.
Get a free report if you’re turned down for credit. Anytime you are turned down for credit, you’re guaranteed a free report.
Get a free report if you’re looking for a new job. Within the first six months of seeking employment, you can have a freebie.
If you apply for a mortgage, you’re entitled to a copy of the credit report and score the lender uses.
Order your free national, specialty consumer report annually.
Need to add a fraud alert or an extended fraud alert to your credit report? You get one or two additional free reports, respectively, over the next 12 months from each bureau.
Every time your insurance renews, look at the disclosure language, which is usually in the front of your policy, to see whether your insurance company used a credit report to set your rates. If so, follow the instructions and get another free credit report.
Monitor your bank and credit card accounts online weekly. If something funny is going on, you’ll know about it sooner.
Set up free alerts on your accounts that tip you off when certain types of transactions are made.
When paid monitoring may be worth the time and money
Depending on the depth of your wallet and your degree of credit nervousness, paid monitoring may be for you. Here are some circumstances when paid monitoring makes sense:
Your credit is damaged and you’ve been trying to improve it for some time. Rather than ordering your report frequently, a service that gives you more frequent access for a low monthly or annual fee may make sense.
You’re planning on making a large purchase that requires your credit score to be in primo condition.
You’ve been the victim of identity theft and accounts are being opened in your name. After you slap on a credit freeze, monitoring may help you sleep better at night.
You’re slightly obsessive-compulsive about your identity or credit file. Monitoring may give you a sense of security.
Credit report or score monitoring isn’t done in real time. Information can be days, weeks, or months old. Credit monitoring alerts you only after you have a problem.
Recognizing the protection you have already
You and your credit card are already protected against fraud under federal law. Unless you fail to notify your credit card company about erroneous or questionable charges on your statements within 60 days, your total liability for fraud is a whopping $50 per card.
And if you have homeowners insurance, the $50 charge is probably a covered peril for which you can get reimbursed. Debit card liability also begins at $50 but can escalate after two days have passed from the time you find out about the fraud. Where debit card fraud is concerned, act in haste!
Many of the major creditors have adopted zero-consumer-liability policies to further limit your exposure and increase your confidence in being able to use your cards safely.