Credit Monitoring

What is Credit Monitoring

Credit monitoring services basically allow you to keep track of your financial behaviour, such as availing new loans, taking new credit cards, or making purchases through them. This means that once you opt for a credit monitoring service, you will be able to identify any suspicious activity and report the same before it is too late. Additionally, you can also make use of the credit monitoring facilities to keep an eye on your own personal credit-related behaviour and credit score. This way, you know if you will be able to take a loan or get approved for a new credit card when you need it. Read on to know more about credit monitoring.

How Does Credit Monitoring Work

Once you have opted for the credit monitoring service, you will get notified regarding all your credit-related activities. These credit-related activities could be the likes of opening new loan accounts, taking new credit cards, or any hard inquiries that a financial institution has made while looking into your loan/credit card application. Thus, you will be able to identify if anyone has engaged in any kind of fraudulent activity involving your personal credentials.

If you do spot any inconsistencies, chances are that it is either a data entry error or some suspicious activities are at play. If such a scenario arises, you must report the same before someone possibly makes a big purchase through a credit card or has taken a big sum of money as a loan that you never applied for. Failing to bring such anomalies to the attention of the credit bureaus may lead to a significant drop in your credit score, which can affect your future prospects to avail a loan like personal loan or a credit card.

What are the Best Ways of Credit Risk Monitoring

Given that now personal information can be extracted from anywhere in the digital age, there is a need for credit monitoring services. Some of the best ways in which you could monitor your credit are as follows:

 

• Check Your Credit Report Frequently

• Track Your Bills

• Check Your Messages/Emails Often

• Check Your CIR via Third-Party Apps

Check Your Credit Report Frequently: One simple way to monitor your credit is to frequently check your own credit information report (CIR) for any discrepancies. If you spot any discrepancies or possible misprints, you should raise a dispute with the bureau immediately.

 

Track Your Bills: One way to keep track of your credit report is to be mindful of all the active credit cards that you are using and all the loans you have taken. If your credit information report shows more loan/credit card accounts than the ones you are aware of, you should report it to the credit bureau.

 

Check Your Messages/Emails Often: If someone other than you applies for a credit card or a loan on your behalf, you will get messages containing the loan/credit card application numbers. You should also keep an eye out for messages which say that your credit card will be delivered on a particular date and take it up with the concerned authorities if you never applied for it. Another type of message that you must keep a track of are those which talk about the amount that you have swiped on your credit card. If you did not make a transaction, you must report it immediately.

 

Check Your CIR via Third-Party Apps: These days, you can also check your credit score through the mobile application of your preferred banker for free. If your banker provides this facility, you must make use of it and keep checking your credit score timely. If there is an unexplained drop in your credit score, you must look into your credit information report and scan it for any anomalies immediately.

Factors to be Considered for Credit Monitoring

Some things you must keep out an eye for while conducting a proper credit monitoring process are as follows:

 

• Check if there is a change in your name on the report

• Check whether or not your address has been changed

• Check if the number of loan/credit card accounts you actually have tallies with the number of such accounts on your report

• Check if there is a change in your age or other residential details

• Check if there is a loan or a credit card payment default that you had no knowledge of previously

Benefits of Credit Monitoring

The benefits of monitoring your credit are as follows:

 

• Prevent Identity Theft: If you monitor your credit report closely, you will be able to spot any discrepancies and potentially save yourself from becoming a victim of identity fraud. If such inconsistencies stay unnoticed for a long period of time, they can harm your credit score, and in turn, your creditworthiness to a great extent. When you spot such anomalies, raise a dispute with the credit bureau or inform the concerned financial institution.

• Customised Alerts: Once you opt for credit monitoring services, you can keep alerts for events ranging from potentially fraudulent transactions to a reduction or increase in your credit score. Thus, you will always know whether or not you can take a loan or a credit card in the future.

Limitations of Credit Monitoring

Credit monitoring can help identify potential frauds, but it is not a guarantee that fraud will not occur. Monitoring cannot prevent someone from hacking into your data or opening fake accounts in your name. To safeguard your personal information, be especially cautious about sensitive data, such as card numbers, bank account numbers, passwords, mobile numbers, and other security codes.

Can Credit Report Monitoring Impact CIBIL Score

No, credit monitoring will not impact your CIBIL score negatively as it is counted as a soft inquiry. Only the kind of inquiries that banks/NBFCs make while reviewing your credit card/loan application are known as hard inquiries. Too many hard inquiries in a short span of time are what will bring your CIBIL score down as it is considered to be a sign of credit-hungry behaviour.