DIY Credit Monitoring

Most people can get by with using the free annual credit report provided by the credit bureaus. Instead of getting all three reports at once, you would need to get each report spaced 4 months apart. Because most information will be noted on all three reports, you should be able to spot any erroneous information that might crop up. If you want to play it extra safe, you can also place a security hold on your credit for a small fee. This hold will prevent anyone from opening new accounts or pulling your credit information without your prior consent.

When Should You Pay for Service

There are a few good reasons to apply for credit monitoring, and nearly all have to do with the same reason: identity theft. So if you fall into any of the following categories, you may want to consider credit monitoring to minimize the risk to your credit scores:
1. You’ve recently moved. If your mail isn’t properly forwarded, someone might have the opportunity to get a hold of your bank or credit card statements, which in turn puts you at risk for fraud.
2. Your debit/credit card was lost or stolen. This one goes without saying. Any time your cards are out of your possession, you are at risk for fraud. Cancelling the cards as soon as you find out is one step to protect yourself, but you may want credit monitoring as well, just in case.
3. You were recently burglarized. Thieves don’t just take electronics and jewelry. Often, they’ll take personal information as well. You may not realize that your personal information has been compromised until months later, so it pays to sign up for credit monitoring in this instance.
4. You are planning on making a large purchase – mortgage, new car, etc. You’ll want to review your credit history for any signs of potential fraud, and you’ll also want to be sure that shopping around isn’t lowering your score. The credit bureaus have gotten better about this, but it pays to keep track of your inquiries and their effect just the same.

Which Service to Choose

Most credit monitoring services are fairly similar, but you’ll want to choose an option that offers at least the following:
1. Access to all three credit reports.
2. Access to your credit scores.
3. Alerts regarding any changes to your report.
4. Identity theft insurance.

In general, banks will charge you less for credit monitoring if you have an account in good standing, so check with them first. If you can’t find the features you want with your personal bank, then shop around and choose one of the three credit bureaus’ offerings. Third-party offering are generally only a good choice if you’re looking for lots of extra features. Regardless of how you decide to manage your credit information, keeping track of your credit reports for accuracy can only help you when it comes to ensuring your overall financial health.

1. Get Rid of Pre-approved Offers. You may not be interested in getting a new pre-approved credit card, but identity thieves are. While you can shred these types of unsolicited offers for new credit, a better option may be to stop them altogether. You can opt out of pre-approved offers by going to optoutprescreen.com to stop the credit bureaus from sharing your credit information with other companies.

2. Leave the Pin Number at Home. Never write the pin number to your credit or debit cards on the card, and never store pin numbers in your wallet or purse. Commit the pin number to memory instead. Try to choose something that is easy for you to remember but hard for others to guess. Change your pin number periodically – every 3 to 6 months – and don’t use the same pin number for every card.

3. Beware of Phishing. Emails that ask for personal information may seem to come from legitimate companies. However, it’s rare for any company to solicit personal information or account updates through email. If you are in doubt, contact the company directly –don’t use the links provided in the email, as they may direct you to a site that will steal your information.

4. Consider a Credit Freeze. If you aren’t planning on opening any new accounts in the near future, you can institute a credit freeze by contacting the credit bureaus. While under the freeze, your account won’t be visible to any lenders without your explicit permission. If you are in the military, you can request a special type of credit freeze that will prevent new accounts being opened in your name while you are abroad. Freezing your credit file typically costs a nominal fee if you aren’t already a victim of identity theft, so be sure to weigh the costs before your commit.

5. Use Credit Monitoring. The major credit bureaus have different types of credit monitoring available if you want to be able to keep track of potentially fraudulent activity. You can also monitor your own credit if you stagger your free yearly credit report. Each bureau is required to provide one credit report per year (sometimes more, depending on your state). By staggering your requests, you can get an accurate snapshot of your credit every 4 months.

Making it difficult for criminals to access your personal information is one of the best defenses against identity theft. Restricting access to your credit, when combined with proactive monitoring, can significantly reduce the chances that you’ll be a victim of identity theft. If you do notice something out of the ordinary, report it right away – your liability is limited to only $50 in most cases, but only if you report the suspected identity theft right away.

Online Monitoring – if your credit card company allows you to monitor your charges online, take advantage of that to keep track of your charges. Set up an email alert whenever your credit nears its limit, and check for unauthorized charges on a regular basis. Most credit card companies have a 0% fraud liability in place, but this only works on your behalf if you notice a suspicious charge and report it promptly – it can prove difficult to dispute a charge that you don’t notice until months later.

Set Spending Limits – don’t trust your credit card company to hold you to your credit limit. Many companies will allow you to go over your limit in charges, and then access an over-limit fee for each charge that is above your approved credit line. This could mean that a thief with your credit card number might still cash in, even if your cards are maxed out. The best way to handle this is to tell your credit card company not to allow courtesy over-limit spending. While it means you will have to be more careful about your own spending as well, it can prevent a host of problems with over-limit fees down the line.

Leave the Plastic at Home – unless you’re going on a major shopping spree, you probably don’t need every credit card you own in your wallet. Only take one or two, and you minimize your risk if your cards are ever lost or stolen. By keeping excessive cards out of your wallet, you may also cut down on impulse spending, which can help your budget and your credit score in return.

Be Smart about Online Shopping – only shop at reputable sites that you know you can trust. The holiday season is not the best time to be adventurous with online shopping. A merchant website can be up one day and gone the next, so be sure to deal with companies you can trust – and keep your anti-virus, firewall, and browser up-to-date to minimize security risks overall.

Consider Fraud Monitoring – if you can afford it, consider paying for a fraud monitoring service over the holiday season. This will make it simple for you to know if anyone has opened a new account in your name, or is making large purchases on accounts you may not have used actively in some time. Be sure to choose a reputable company, ideally one that will provide a monthly report, either through the mail or online, about your credit activity. Match what you see in the report to what you know you’ve charged, and if you notice discrepancies, contact your credit card company right away.

With credit card fraud and identity theft, the sooner the fraudulent actions are caught, the easier it is to straighten out any potential damage to your credit history. So be alert, shop safely, and always monitor your statements for unusual activity. If you follow these tips, you can enjoy your holiday shopping without worrying about a nasty New Year’s surprise on your credit score.

1. Pay your bills on time. Sounds simple, but this is the best way to keep your scores high. Delinquent payments and collections have a severe impact on a score.

2. Keep credit card balances low. Large balances will have a negative impact on your score. I generally recommend keeping balances below 30% of your credit limit.

3. Don’t open too many new accounts too quickly. Especially if you’re relatively new to credit. This will create too many inquiries which hurts your score.

4. Make sure the information in your credit report is correct. If it’s not, dispute it with the credit agencies and/or with the creditor directly.

5. It’s OK to check your own credit. Be sure to monitor your credit on a regular basis and be ready to dispute any derogatory information on your reports!