Your credit is an important part of your identity.
Anyone with your personal information (e.g. name, date of birth, Social Security number, etc.) can use it to commit fraud in your name. Perhaps the worst part is the negative impact that identity theft can have on your credit. Bad scores typically result in unfavorable interest rates and can even prevent you from leasing an apartment.
With identity theft on the rise, you need to take extra precautions to protect yourself. If you are concerned, credit monitoring services are a great start. These services are beneficial for the following two reasons.
Protect Against Identity Theft
Identity thieves use sophisticated methods to access sensitive information. Attackers prey on unsuspecting victims and use their information to use or open new accounts in their name. This is why it's a good idea to regularly monitor your credit and files.
Credit monitoring helps to protect against identity theft as it tracks certain types of activity. You receive notifications when a new account is open in your name so you can respond immediately. This gives you a huge advantage in protecting your identity.
But it's important to note that services monitoring credit don't necessarily prevent identity theft. Not everything shows up on a credit report and attackers can find other ways to commit fraud in your name.
Your credit score is a three digit number that is calculated based on your credit history. Credit issuers look at this score to gauge your creditworthiness and assess how much you can qualify for.
Many people are often unaware of what shows up on their credit report until they actually apply for credit. This is a problem for obvious reasons as unpaid accounts (even if you didn't open them) could have a negative impact on your score for years. Knowing what shows up on your credit report is important for this reason.
Credit monitoring services track changes to your credit report and notify you of certain activity. You also get updates on your credit score so you can better monitor your financial health. Credit monitoring can be especially beneficial whether you are looking to protect against identity theft or track changes to your credit score.