How Do Credit Monitoring Services Work To Protect Your Credit?

According to the US Department of Justice (DoJ), the common motivation for identity theft and identity fraud is economic gain.

Most cyber criminals and hackers are usually after personal information to apply for credit cards or hack into credit card and bank accounts for personal gain.

Credit fraud is an evolving and highly sophisticated crime, with cybercriminals evolving every day and always appearing to be ahead of law enforcers. For this reason, it is not guaranteed that anything can be done to recover your lost credit. Hence, it is essential to protect your credit, and the best option is by signing up for credit monitoring services.

This will give you real-time credit score monitoring and ensure that all transactions that impart your FICO score emanate from you. The benefits of a good credit score far outweigh the cost of credit monitoring services since you will be able to access low-interest credit, apply for property leases and rentals, and qualify for jobs.

The scope of credit monitoring service is as highlighted: –

1. Real-Time Credit Score Monitoring Alerts

One determinant factor for your Credit score is your debt level. When your overall debt increases, as your assets remain constant, this adversely impacts your FICO credit score. Credit score monitoring entails reporting all changes on your debt levels and alerting you in real-time to enable you to report a suspicious transaction to your lender and possibly thwart a fraudulent breach. Additionally, you can get FICO score reports periodically so that you keep track of your debt management plan performance.

The credit score monitoring tools use advanced technology that scans all transactions in the financial system and can capture and information in real-time.

2. New Account Openings Alerts

Opening a new credit line also impacts your FICO score. Credit score monitoring also entails tracking activities tied to your identity and Social Security Number (SSN). This alert prompts you to confirm if you are indeed the person initiating the account opening transaction.

The credit-monitoring alert will enable you to alert the lender and is then red-flagged. This will then halt the account opening. Consequently, your credit score will not be impacted if the data is not conveyed to any of the following three credit reporting bureaus; Experian, Equifax, and TransUnion.

3. Credit Report Review Alert

Some leading credit score monitoring platforms also capture instances when your credit score is reviewed from a source other than yourself. This is usually indicative of a possible account opening or a probable stage in identity theft.

In most instances, the credit repo review alert is limited to within the last three years. But some premium services survey when credit reports searches are done for around seven years, which are all fundamental in credit management.

4. Identity Theft Protection

Identity theft is the first step in credit fraud.  Premium credit score monitoring goes a step further by surfing the dark web to trace your social security number and alert you if your data is already breached. With the recommendation of your service provider, you can then use the alert and findings to repair your credit score if there is concrete proof that your credit score has plummeted in the past following dark web activities.

Furthermore, some credit score monitoring premium service packages include identity theft insurance, which can indemnify your financial losses and restore your credit score to its initial rank.

5. Identity Theft Restoration

What’s the next step once your credit score has been compromised?

Identity theft restoration entails mitigating the consequences of a data breach and reinstating your credit score to its initial position.

Your identity theft protection company should be able to contact the three credit agencies, your lenders, and other organizations such as law enforcement agencies in a bid to restore your data and prevent it from being used to perpetrate the crime. Additionally, the turnaround time must be reasonable to avoid the inconveniences should you seek credit services such as mortgage refinancing and credit card application.

Being Vigilant

It is important to note that credit score monitoring is not an end to itself since it only serves to alert you whenever your credit score shifts or if there is any transaction on your credit lines. Therefore, you should be vigilant and avoid engaging in risky activities such as sharing your social security number online, opening spam emails, and clicking on random links when surfing the Internet. Most importantly, you should ensure that your credit monitoring service provider has access to the three primary credit agencies’ data.