Most credit monitoring services issue alerts when there is a new inquiry on your credit report.   This can be helpful to catch a potential fraud activity if you get an alert that Sears just had an inquiry for your credit when you know you have not applied for credit at Sears. 

However, credit monitoring does NOT do anything about existing errors on credit reports.  If there was a fraudulent account on your credit file and you sign up for credit monitoring and never look at your full credit reports, the fraud could continue until who-knows-when.  Additionally, some credit monitoring services only check one or two of the three major credit bureaus.  To do true monitoring, you want a service that covers all three bureaus as not every financial company pulls your credit (creating an inquiry) from all three bureaus.  If you’re only monitoring one bureau, and fraudulent accounts are being opened at companies that check one of the other two bureaus’ reports, you won’t know about it.

WHAT TO DO
> Check your own credit reports regularly.  You can do this at no cost.   See #10 on this Identity Theft Prevention list.  Do this BEFORE signing up for monitoring services and continue to do so regularly throughout the year.  Each consumer in America gets at least three no-cost reports each year.  You can check one of them every four months for continuous credit monitoring.

> When reviewing your credit report, look for unknown accounts; unusual or incorrect balances on your existing accounts; inquiries that you don’t recognize; and extra social security numbers or names that don’t belong to you.  Contact all three credit bureaus to correct the errors, even if you only review one of your reports.  By law, they must investigate the items you dispute and reply within 45 days.

> Read the fine print in any credit monitoring agreement before you sign up, including their cancellation policy and process.  The Identity Theft Resource Center has a great information sheet on this topic.

> Remember that most lenders in the U.S. use FICO scores for their credit and loan approval process.   Some monitoring services include a ‘credit score’ with your service.  If it is not a FICO score, it is not an apples-to-apples comparison to what a lender will be looking at. 

Yes, we’re all busy these days.  And we want fewer things to keep track of and worry about.  This is a friendly reminder against complacency.  Signing up for a monitoring service means you have a TOOL to assist you in your credit building and protection efforts.  Stay on top of it by staying tuned into it.

You can get a Credit Check-Up that gives you an analysis of your current credit situation as well as strategies to build your credit for only $100.  Contact us today to order yours.

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According to ITRC, only 2.4% of the 2008 breaches had encryption and only 8.5% of them had password protection.  Obviously, businesses and government have a long way to go to protect sensitive consumer information.

That leaves us, as consumers, to try and protect our information as much as possible.  It is important because inaccurate and fraudulent information on your credit report can lead to lower credit scores. 

WHAT TO DO

Include Credit Monitoring as part of your regular Financial Fitness routine.  Look on your credit  report for accounts, names and addresses that you don’t recognize.  Report the errors to ALL THREE credit bureaus, even if you only looked at one report.  You should receive updated credit reports from all three in response to your letter.

Be proactive with Identity Theft Prevention.  This includes limiting the number of times you give out your Social Security number and regularly shredding all financial and personal statements that are going into the trash.

Take the Identity Theft Quiz provided by ITRC and start using the additional preventative measures that they list.

Respond quickly to any data breach letters you may receive in the mail and follow the instructions completely.  They usually include credit report monitoring which gives an opportunity to check immediately, and into the future, for signs of fraudulent activity.  Be sure to keep copies of everything, especially the initial letter about the breach, as they may be important tools to remove inaccurate accounts from your credit reports in the future.

Be proactive with the businesses your frequently use.  Take the ITRC’s Consumer Risk Test to the places you do business with to find out how much they are doing to protect your personal information.

Better credit scores are part of a good Financial Fitness program and protecting yourself from identity thieves is imperative.  Your information is out there; doing as much as you can to protect it is just plain smart.

Credit Report Monitoring is an important part of Personal Financial Fitness and it’s easy to do.  To get a copy of your credit report from one, two or all three of the credit bureaus, go to annualcreditreport.com.   This is the place to get the actual free reports that consumers are entitled to by law.  There is no charge and nothing to sign up for.   Our article on November 26, 2008 has more information on credit monitoring.

If you want to know your current FICO scores, you can obtain all three of them, along with all three credit reports with the FICO Credit Complete for about $48.  Click here and look for FICO Credit Complete on the upper right side. 

With both of these options your reports will be available to you for 30 days when you set up log-in information.  And checking your credit reports in either of these two ways does NOT count against your credit score as a Hard Inquiry.

When reviewing your credit report, look for unknown accounts, unusual or incorrect balances on your existing accounts, inquiries that you don’t recognize, extra social security numbers or names that don’t belong to you.  Contact all three credit bureaus to correct the errors, even if you only review one report.  By law, they must investigate the items you dispute and reply within 45 days.  Mark your planner for four months later to schedule your next credit report monitoring.

For your Professional Credit Analysis and Review, contact us today.

Under the Fair Credit Reporting Act, everyone in the U.S. is entitled to THREE credit reports per year, one from each of the three major credit bureaus.  You can get these yourself, at no cost, and it doesn’t count against your scores.  By checking a different bureau’s report every four months, you can monitor your credit year round.  Look for any unknown accounts; unusual balances on existing accounts; incorrect personal information such as misspelled names, extra social security numbers and inaccurate birth dates.  Contact all three credit bureaus immediately to correct the errors. 

Many credit card companies and financial institutions offer some sort of credit monitoring service to exisiting customers.  If it is available to you at no cost, take it.  Even if it is not the most comprehensive program, it can be a supplement while you continue to do your own monitoring.

Because more people are becoming aware of the importance of their credit rating, almost every company out there is jumping on the band wagon with some kind of offer.  They vary greatly in price and scope of what is included.  Understanding what is provided before you sign up will help you to get a program that fits your needs.

Credit monitoring services primarily protect against new account fraud.  They may monitor one, two or all three credit bureaus on a daily, weekly, monthly or quarterly basis.  Typically, the consumer is notified when a new inquiry appears on their credit, an indication that there is a credit application using their name, social security number and birth date.  Notifications usually happen when a new account is opened, an existing account is closed or, sometimes, if the balance on an existing account changes significantly.

Some services include an updated credit score.  That part sounds good, except that most services do not provide a true FICO score and FICO scores are what the majority of lenders use.  One place to get your actual FICO score along with your credit monitoring is from the FICO company itself.  They have a Score Watch service that gives you daily credit report monitoring and weekly FICO score monitoring.

The main thing to remember is that you CAN be proactive, learn about your credit, and take steps to protect it. 

And they do what every single person in America can do for themselves.  For free.

As we always emphasize to our clients, our seminar participants, and even our families, monitor your credit regularly!  It doesn’t cost anything but your time when you use the free annual credit reports you are entitled to.   Schedule it in your planner or on the family calendar.  Everyone gets three reports per year; check one from each credit bureau every four months for year-round monitoring.

LifeLock puts a fraud alert on each of their clients’ credit reports.  Fraud alerts are intended to be used by consumers that have experienced identity theft or whose personal information has been compromised.  Theoretically, a consumer with a fraud alert would be notified by any company that has been asked to lend that consumer money or open a credit account.  The lending company purchases the credit report to determine if they will or will not grant the loan and they see that there is a fraud alert which requires them to contact the person who the credit report is about and verify that it is really them.

Does it work that way?  We can only hope so as reports and statistics about this are few and far between.  The financial industry states that it could be very inconvenient for the consumer who has to wait to be approved for their loan due to the restrictions of the fraud alert.

One concern is that the credit bureaus, who have to pay for the time and expense to place the fraud alert on the credit reports, may enact some future rule or limitation that puts a stop to pre-emptive, continuous fraud alerts such as those that LifeLock is doing.  In fact, Experian, one of the three major credit reporting agencies (bureaus), filed a suit against LifeLock in February in California claiming that the company violates the Fair Credit Reporting Act by placing fraud alerts on behalf of consumers and then renewing them in perpetuity.

Another lawsuit has been filed in Arizona by a Maricopa County resident as a proposed class-action lawsuit claiming that the company is not legally allowed to perform the service it offers and the million-dollar guarantee they offer has so many limitations it is worthless. 

LifeLock does have an additional service that their adult, annual members can purchase for $25 a year per child under 16 years old.  They will check the child’s credit reports and place fraud alerts if warranted.  As we mentioned on March 21, 2008, you can check for a credit report under your child’s name and social security number with the free, annual credit reports.  If they are not available, that is usually a good sign that their information has not been misused.  Mark it on the calendar and do this yourself every six months.

BOTTOM LINE: Save your money, be pro-active and commit to including credit report monitoring as part of your financial fitness routine.