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Credit monitoring: How it works, benefits of credit monitoring and more

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Your ability to access credit depends on your history of making payments and bills. If your records report a negative score, then you may face some challenges borrowing money from creditors. Therefore, you should exercise credit monitoring to keep track of your borrowing ability. Here are the best credit monitoring services of 2022 to get you started. They can help you know what to do to stay in good books.

So, what is credit monitoring? Well, this is the process of exercising control of your credit score. In this regard, monitoring services track your history to check the accuracy and any suspicious activity.

Credit monitoring services alert you of any changes made to your reports. That means you will always have information about your credit report. For that reason, you can take necessary action in good time in case someone is misusing your information.  However, credit monitoring is not the same as credit reporting.

How credit monitoring works

 To do effective credit monitoring, you should access your credit reports. Credit reporting entails the provision of details of your existing loans and repayment history. The credit report gives you a score based on your credit performance and ability to pay loans.

On the other hand, credit monitoring involves a study of your credit report to ascertain its correctness. As you go through the report, you can get to know whether all activities are genuine or not. You can do this on your own or use the services of a credit-monitoring firm.

To get started with the process, credit-monitoring firms get your credit reports from credit reporting agencies. They then send you alerts as often as agreed upon in the initial engagement. From that point, you can raise concerns in case there are any suspicious records.

In the end, you will constantly remain aware of what is happening in your credit report and take action as is necessary. However, credit monitoring will not fix negative comments in your report or prevent identity theft.

 Why use credit monitoring

 Keeping track of your credit report is important in many ways. Here are key benefits that you will get from this process:

  • To deal with identity theft issues

Credit monitoring alerts you of any new accounts opened without your knowledge. In this age of technology and the internet, identity theft is a real problem. If you do not detect it in good time, it will adversely affect your credit score.

You will receive notification of any change in your credit activities. That way, you can tell when there is potential identity theft in a good time. Most importantly, you will stand a chance to take the necessary action.

  • For better financial planning

If you do not plan your finances well, your credit score will show negative reporting. As a result, your chances of getting good loans are low. However, with credit monitoring, you get alerts about any changes that could affect your credit score.

With these services, you can understand the activities taking place and the impact they have on your credit report. In addition, you will get to know your credit health and see areas where you are making mistakes. In the end, you will know the corrective measures to implement. Again, you will be in a position to make better financial decisions.

  • Real-time custom alerts

With credit monitoring, you can choose the alerts you want to get. The good thing is that you will get notifications as frequently as you have decided. For example, you can choose to pick notifications for any suspicious activity on your credit card.

You can also decide to request the best loan rates when applying for a loan. That way, you will save a lot by getting the best offers in the market.

The main reason why credit monitoring is essential is to deal with identity theft impact. If anyone opens new loan accounts with your details and defaults on payments, your credit score will go down. Therefore, you should endeavor to know what is happening with your credit reporting as often as there are changes to it.

This is what credit monitoring is all about – to safeguard your credit records and ensure you are in good credit standing.

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