We all want to have a good credit record so we can get preferential loans facilities from our lenders. As such, credit monitoring companies exist to monitor our credit records and ensure we have the best services from our lenders. When you want to maintain a good credit record, a good credit monitoring company will keep you informed when any changes occur in your account. Such a company will notify you of your credit score at all times, especially when you are planning to apply for a personal loan. As such, associate with a good credit monitoring services company so that you can stay on top of your credit history.
How Credit Monitoring Services Companies Work
In the United States, there are three credit monitoring services companies. These companies maintain credit reports about lenders. As such, these have three different reports about you. For you to monitor each of these reports, you request the reports. The reports have personal information about your financial transactions.
Compiling Your Credit Reports
There are several issues that these credit monitoring services companies consider when compiling your credit reports. These are issues such as:
- The number of your open accounts and activities – These can be loan accounts, credit card accounts, and so on.
- Hard credit inquiries about you from the various lenders – Since these inquiries show on your credit reports, they determine your creditworthiness.
- Late or missed payments – Since this information remains in your credit reports for 7 years, it is an integral part of your creditworthiness.
- Filing for bankruptcy – This information remains in your credit reports for 7 to 10 years and calculate your credit scores.
- If your accounts go to collection agencies due to failure to pay – This information calculates your credit records.
Checking and Monitoring Your Credit Reports
For you to maintain a good credit score, constantly monitor your credit reports. Order free copies of your reports from each of the three credit monitoring service companies annually. Checking this information ensures that you monitor the reports. It tells when suspicious activities have occurred on the accounts. It also avoids identity theft.
How Credit Monitoring Comes About
If you do not trust yourself on matters regarding credit monitoring, then pay a credit monitoring services company to do it for you. Credit monitoring services companies will check your credit reports regularly. If new loans or credit cards show up on these reports, the companies will inform you so you can react quickly.
Reasons for Credit Monitoring
There are several reasons why you need credit monitoring on your accounts:
- It discovers fraud before it is too late. When you hire a company to monitor your credit, you discover fraud on your account. Identity theft deals a blow to your credit scores. As such, you suffer financial fraud, and this negatively affects your credit rating.
- Inaccuracies are checked. There are times a creditor reports inaccurate information about you to the credit bureaus. It is also possible that credit bureaus report inaccurate information about you. The good thing is that such information is fixable as long as one files a dispute. The only way to spot such inaccuracies is registering for the services.
- It explains how your actions affect credit scores. Your FICO scores are influenced by several factors that you must know. Other than the factors discussed at the beginning of this article, there are other smaller elements that you should be aware of. New accounts, your balances, and other information availed to the credit bureaus also influence your scores. Once you keep track of your accounts, you can know what to do in case potential issues about your account arise.
- It helps you become credit ready. The fact that you enrolled for these services means that you are always aware of your credit scores. It also means that you are monitoring your scores regularly and ensuring your account is accurate and ready for credit. Since financial experts always recommend that one check his/her credit scores before applying for loans or credit cards, this means you monitored your credit scores well in advance of taking a loan.
