How to Keep Tabs on Your Credit - dummies

How to Keep Tabs on Your Credit

Checking your credit is easy, and a lot rides on your credit score. Lenders use it to determine the interest rate you will pay on a home mortgage, a car loan, and your auto insurance premiums and it may even affect your employment. Having a credit score of 750 or above can save you tens of thousands of dollars in interest costs versus someone with a credit score of 650.

A plethora of services advertize that they will monitor your credit report and score for you. Many also provide some degree of identity theft protection. However, monitoring your credit doesn’t eliminate the risk of identity theft; it merely helps you learn about any fraudulent activity as soon as possible.

Many services that offer to keep track of your credit cost $40 to $200 per year and often aren’t as valuable as they first appear.

Consider the following questions when comparing credit-monitoring services:

  • Is the service checking with just one or all three of the major credit bureaus? The three major credit bureaus are Experian, TransUnion, and Equifax. You want the service to check all three.

  • How often is the information updated? More frequent equals more valuable.

  • How and how often will you be notified if something raises a “red flag”? You should only use services that alert you of key changes to your file within 24 hours.

  • What is the cost of the service? Typically, you should expect to pay $40 a year for one bureau-monitoring service to $200 a year for ongoing monitoring of all three credit bureaus.

  • Does the service provide identity theft insurance? If so, how does it work, and how much does it cover? Be sure to ask potential services their policy on identity theft.

You can monitor your credit reports yourself and save a lot of money. You should request a copy from each credit bureau at least once per year by calling (877) FACTACT (877-322-8228) or online to order your credit report.

You can request a copy of your credit report directly from Experian and then, about four months later, request your credit report from TransUnion. Four months later, request your credit report from Equifax.

The contact information for the three major credit bureaus is as follows:

  • Equifax: P.O. Box 740241, Atlanta, GA 30374; phone 800-685-1111.

  • Experian: P.O. Box 2002, Allen, TX 75013; phone 888-322-5583.

  • TransUnion: P.O. Box 1000, Chester, PA 19022; phone 800-888-4213.

Although the information you find on each of these credit reports may differ quite a bit, most information is duplicated.