Credit Monitoring

Monitoring your credit is tough to keep up with, but so important. Your credit report changes more often than you think. Many people don’t notice when something’s wrong until it’s too late. 

A missed payment gets reported, a new account shows up that you didn’t open, or a data breach exposes personal information tied to your identity. 

Credit monitoring can’t stop any of that. What it can do is flag it fast, which is often the difference between catching identity theft right away and finding out months later when it shows up on a loan application. 

Paid monitoring services aren’t essential to your everyday finances. But if you’re actively working to build or protect your credit score, or you’d rather have an early warning system than comb through your credit reports yourself, they’re one of the more useful financial tools out there. 

What is credit monitoring?

Credit monitoring refers to any tool that tracks changes in your credit reports and/or credit score, and most services cover both. It alerts you to changes in the information contained in your credit report. Not everyone carries a credit card, but that doesn’t mean they don’t have a credit file. 

Credit monitoring is still worth having as soon as you have a credit history on file, such as a car loan or student loan. 

It’s worth stressing the point that credit monitoring won’t stop your information from being stolen. It only alerts you after something has already changed on your file. 

You actually have three separate credit reports, one each from the Big 3 credit bureaus: Experian, Equifax, and TransUnion. Those agencies collect and report your credit activity independently. So your report and score may look different from one to the next. The most comprehensive credit monitoring services monitor all three credit reports and scores. 

Two different companies build credit scores. Equifax, Experian, and TransUnion created VantageScore. Credit monitoring apps most often source VantageScore. 

Lenders, however, are more likely to use a separate company called Fair Isaac Corporation (FICO) for credit scoring. In fact, roughly 90% of top lenders check a FICO Score when you apply for a loan or line of credit. 

In other words, the score your monitoring app shows you and the score your lender pulls often aren't the same number. Both are legitimate, real credit scores. They’re just built differently and used for different things. 

How credit monitoring works 

1. First, you sign up for the service by providing basic personal information, like your name and Social Security number. You must provide your Social Security number for a credit monitoring service to work, since your credit reports are directly tied to your SSN.
2. Once your account is set up, the system will flag anything that it thinks you should note in your credit report. With SmartCredit, you can also learn about steps you can take to improve your score. 3-in-1 credit monitoring services give you updates on the three reports at once.
3. You review the information it flags and act accordingly. If you believe a negative item is an error or mistake, you can pursue credit repair to get it corrected. 
4. After the initial review, the service alerts you whenever there’s something new you should note in your credit profile. It also notifies you of increases or decreases in your credit score.

 Learn more about how credit monitoring works in certain situations »

Tips for using credit monitoring services

#1: Be careful with free credit monitoring 

Apps like Credit Karma and Credit Sesame offer you a free credit score. Unfortunately, free apps usually give you only one score, which doesn't give you a full picture of your financial wellness.

Now, there’s nothing wrong with a free tool. You can make the best of it and fill in the gaps with other credit reports and services. Just don't think it's completely accurate or that it will tell you everything you need to know.

 #2: Don’t worry about affecting your score

Some people think that monitoring your own credit will actually hurt it. It doesn’t. If you use a credit monitoring service with a score tracker, you can check your credit as often as you like. It won’t affect your credit score at all.

 #3: Not everything in your credit history is a mistake or fraud

The main goals of credit monitoring are to maximize your credit score and make it easier to spot signs of identity theft. Monitoring helps with credit repair and fraud detection. But not everything that’s negative in your credit history falls into those two categories. For example, if you missed a payment by more than 30 days, the creditor reports this information to the major credit bureaus. This creates a negative item on your credit report that stays for seven years. That’s a legitimate negative item, and in most cases, you’re stuck with it until it expires.

 So, don’t think that a credit monitoring tool can instantly help you clear out all negative information from your credit report. It can’t. Just like third-party credit repair services can’t magically erase all negative items.

 #4: Look online for a credit monitoring service review before you sign up

Before you sign up for any service, check out the provider online. Make sure the company is rated by the Better Business Bureau; they should maintain an A rating or higher. You can also check out reviews on independent third-party review websites. Never trust the company's testimonials, since they’ll only show you their best credit monitoring reviews. You can also check things like Consumer Reports and the Ripoff Report to make sure you’re not signing up for a scam. 

Monitoring your credit yourself 

You have access to your credit report from each bureau weekly from AnnualCreditReport.com. The Federal Trade Commission made this change permanent in 2023. Getting all three reports and making sure they match your personal records is one way to monitor your credit file.  This is not nearly as thorough as any credit monitoring tool, so we recommend combining the two methods. 

Learn more about how to get your free reports »