4 MIN READ
- Banks require a score of 760 for the lowest mortgage interest rates
- Credit scores can impact your ability to get a job
- Landlords typically check credit scores
- Utility companies use credit scores to decide if a deposit is required
- Cell phone companies use credit scores
- Many states allow credit scores to be used to adjust the cost of your home and auto insurance
- You get better rewards on credit cards with high credit scores
The Simplest Way to Monitor Your CreditUsing an online monitoring service is one of the easiest ways to stay on top of your credit.I have used CreditKarma.com for years. CreditKarma is a free service that provides credit scores from TransUnion and Experian, two of the three monitoring bureaus. But, as the saying goes, “If you aren’t paying for the product, you are the product.” This statement is true in the case of CreditKarma. Their business model is to present you with credit card offers, auto loans, mortgages, and personal loans. A couple of years ago, they even started offering free income tax filing. I understand the trade-offs of using their service and I’m willing to accept them. They don’t spam me with email offers. The advertisements only appear when I log in to their site and check my score.For me, the benefits outweigh the negatives. Whenever I make a change to an account, CreditKarma sends me an email. If I apply for a car loan, a credit card, or an equity line, I get an email from them. If my scores change because of the age of an account or the balance of my accounts, I get an email from them. These automatic notifications give me peace of mind.Paid Monitoring ServicesPricey online monitoring services charge a substantial fee for the same service. There are many available: LifeLock, Identity Guard, IdentityForce, CompleteID, and the list goes on. Not surprisingly, the monitoring bureaus own many of these services. Typically, the costs are in the $20 to $25 per month range. I bristle at the idea of paying for a service the credit bureaus could provide for free if they chose to.If your personal information is compromised, most of the online monitoring services offer some level of identity theft insurance and credit restoration assistance. However, I prefer to monitor my scores on my own with a few simple processes.
Easily Monitor Your Credit YourselfMonitoring your scores on your own is a straightforward process. It involves three simple steps.
- Check your credit card and bank statements for any suspicious activity
- Get your free annual credit reports from the monitoring bureaus
- Actively dispute any discrepancies
- Incorrect addresses, telephone numbers, or employment
- Accounts you didn’t open
- Inquiries you didn’t authorize
ConclusionMaintaining and monitoring your credit score is a relatively simple task and the consequences of not doing so can be quite severe. I hope this article gives you the tools and incentive to take a proactive stance on your credit.
About the Author
Chris Hansen is a Fee-Only Financial Planner in Cincinnati, OH, serving clients across the country and internationally. Chris is NAPFA-Registered and a CERTIFIED FINANCIAL PLANNER™.
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