August 26, 2015

Best Self-Credit Monitoring to Prevent Bad Credit & Identity Theft

Consumer Self-Credit Monitoring

Some consumers protect themselves and their credit reputation from identity theft and inaccurate credit reporting by monitoring credit reports themselves. While professional credit monitoring services offer credit protection 365 days a year, consumers can monitor their credit periodically through free credit reports offered once every 12 months. While self-monitoring credit reports offers limited protection against identity theft and inaccurate credit reporting, many consumers do eventually opt for professional credit monitoring services.

Identity Theft Statistics

Nearly 12 million Americans fell victim to identity theft in 2012 alone.In this country, a personal identity is stolen every three seconds. In the time it takes you to lock your car or house, another person has become a new victim of identity theft.Once a thief has stolen personal identifying information, passwords or account numbers, the victim must go through a series of steps to erase the bad effects of theft. This may include credit repair and credit monitoring for the rest of their lives.

What is Credit and Identity Theft?

Many people don’t realize that thieves steal personal information to commit IRS identity theft as well as credit theft. This involves filing fraudulent tax returns to receive a tax refund. While this differs from the traditional identity theft definition, using identifying information to defraud the IRS has become popular with thieves. Other criminals use information to receive medical or other government benefits in your name.

While most consumers with compromised personal information will want to enroll in a professional credit monitoring service for vigilant monitoring, some consumers may monitor credit themselves in the beginning.

How to Prevent Identity Theft Through Self-Credit Monitoring

Many consumers wish to monitor their credit bureau reports themselves. Whether or not they have been a victim of identity theft or have ever had to dispute inaccurate credit reporting with credit bureaus, consumers should exercise their legal right to receive one free credit report each year from each of the three credit reporting agencies, Some consumers choose to obtain one free credit report from each of the three major credit bureaus, Equifax, TransUnion, and Experian, every four months.

While this does not necessarily alert the consumer to changes in their credit profile between credit reports, it does give them an opportunity to check their credit for errors or possible theft, three times a year, free of charge. For some consumers, especially those who have had little or no problem with credit reports in the past, this may be enough.

Credit Freeze and How Consumers Use It for Identity Theft Protection

A consumer can initiate a credit freeze, also known as a security freeze or credit report lockdown at any time. This is essentially a request made by the consumer to the credit bureaus to “freeze” credit reports, only allowing credit providers access to reports at the consumer’s discretion.

This bars identity thieves from opening credit accounts in the consumer’s name since lenders and other credit providers generally check a consumer credit history before opening new credit accounts. Without the ability to examine credit history, most lenders will not extend credit. In this way,consumers can work to protect their credit initially

Drawbacks to Self-Credit Monitoring

Although some consumers choose to monitor their credit profiles themselves, there are some drawbacks. Because consumers are limited to free credit reports only once a year, many people will fail to catch credit reporting errors or breaches in identity in time to lessen the damage to credit. While credit freezes can be a good way to stop identity thieves from obtaining consumer credit, there are charges involved with this method of protection.

Though many states limit the amount of money credit bureaus can charge for freezes, consumers must pay each time they place a credit freeze on a report, in addition to a fee for removal. This can add up when applying for credit if lenders wish to check all three major credit bureaus.

Find Credit Monitoring Plans With The Best Identity Theft Protection

Consumers must be vigilant in monitoring credit reports for theft and inaccurate credit reporting.While self-credit monitoring methods may be useful in the beginning, consumers need to be aware of the limitations this type of monitoring affords.

Exploring a credit monitoring service that protects you 365 days a year and alerts you to changes is an important first step toward protection.